No matter if you are running a big business or a small household without planning the budget both cannot run smoothly. Planning the monthly budget is the key to financial stability and prosperity of a household.
So how do you go about planning your monthly budget? If you are the breadwinner of the family you can follow the time tested approach of handing over the reins to the lady of the house and let her do the planning or you can be more creative and call a meeting of all family members of the house just like you would do if you are running a business. Involving all family members also gives them self confidence and makes them feel important about themselves as contributors towards the household. Especially include children in the planning process. Kids nowadays expect everything from their parents without appreciating the hard work that goes behind earning money. Involving them in the monthly budget sessions help them broaden their outlook towards money and family. It teaches them the importance of savings.
You can start the discussion with highlighting the income from all sources for the month. Then continue with the expenses mentioning in detail how much you plan to spend on each item like food, groceries, clothes, bills, etc. Set aside some amount as pocket money for your children. Encourage them to do similar exercise with the money they would get as pocket money. Let everyone know how much you are planning to save. Finally you can let all members know what treat they can expect if the family meets its financial goals for the month.
Once you plan the monthly household budget, make all efforts to stick to it. Emergencies do arise once in a while so make provisions in the budget to tackle additional unexpected expenses. In the subsequent month do a similar exercise. But also make it a point to discuss the previous month’s budgeted and actual expenses. Analyze along with your family members what went well and what did not go as per plan in the previous month and how that affects the current month’s budget. Thank everyone for contributing in some way or the other towards the monthly budget. You can also congratulate your children if they manage to save some amount from their pocket money. And in case you have met your goals for the previous month don’t forget to treat your family as promised.