During these tough economic times, having a family budget and sticking to it is more important than ever. Determining who is going to manage the family budget is an important decision, but equally important is communication between the family members. It is critical to know if a budget is or is not working. Only by reviewing your expenses in a timely matter will your budget be worth more than the paper on which it is written.
The person who is going to manage the family budget needs to be the person who has time and energy to accomplish the task. They also need to possess the fortitude to make the budget work. Managing the family budget means more than just paying the bills on time. While paying your bills in a timely matter is important, it is also important to know where you money is going. How many of us really take the time to analyze how much money we spend during the course of a month or even a year? The person in charge of the budget should do this each month and compare the actual family expenses to the family budget. Only by reviewing and analyzing your monthly expenses will the family be in control of their financial position and know if they are moving ahead or falling behind.
In some situations it may make sense to split the financial duties betweenfamily members. This allows each family member to be involved in the process. For example; one family member could be responsible for opening, sorting and paying the bills, while the other family member could be responsible for totaling and filing the bills. The expenses should be totaled either manually or by entering the expenses into a financial program or an excel spreadsheet..
At the end of each month the family can should meet and discuss their spending for the previous month. If they went over budget it’s important for them to know why. Was there a one time unexpected expense which put them over budget or did an expense occur which they had been saving up; like an annual insurance bill or a vacation. By reviewing your expenses monthly you can quickly realize if you are living beyond your means. This will allow both family members to look for ways to cut back on the family expenses before ending up deep in debt. .
If one person handles the whole budget process, it is important for them to communicate with the other family members. Knowledge is key to making the budget work for everyone and there are many good reasons for both family members to have knowledge of the family finances. In an emergency, it’s easier to take over paying the bills if you have some idea where to start.