Create A Family Budget Early In Marriage
Why You Need To Create a Family Budget Early On in Marriage
You read the title to this article, and I can hear you saying, “here comes another pitch to create a family budget”. Well, you’re right, it is, but please, read on because it is that important. If you’re planning on starting a family anytime soon, it really is in your best interest to be aware of the many costs associated with raising a child.
If I were to tell you what the average cost of raising a newborn child up to and including college was, I might be accused of trying to talk you out of it. However, that’s not the purpose of this article. There will be many expenses that you might not be aware of and our purpose is to emphasize again the importance of creating a family budget and being prepared. Raising a child entails a high level of commitment for both parents. Beginning with medical bills, diaper service, as well as baby formula, can be a significant amount that some parents simply aren’t aware of.
Having a realistic family budget already in place can be a tremendous help for the new parents. It will help you to deal with the normal expenses as well as those unexpected ones that are sure to pop up.
Most individuals who didn’t create a family budget, ask the question, “where do we begin?” There are a number of ways, but the easiest, and the way that we advise our clients, is to buy a family budget software program that will guide you through the entire process. There are quite a few budgeting software programs in the market place, but most just don’t fit the bill, and won’t work for you.
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Many families think along the same lines as a single individual, it’s too hard, and worse, following a budget is impossible. Nothing could be further from the truth. You can create a family budget just as easy as an individual personal one, you’ll just have more different types of expenses.
Start by listing your sources of income and expenses, and then allow the budget software program to guide you the rest of the way. A good software program will provide various tools to help you, and will also offer free training if you need it. The most important detail, and quite frankly the bottom line, is do you earn more than you spend? If not, you will need to change your spending habits accordingly. Your goal should be to establish savings plans to provide for future purchases plus those unexpected emergencies.
Once you create a family budget and have it working, you’ll be able to track your spending and stop some if not all of those unnecessary purchases. Even worse, is continuing to buy those items and building credit card debt.
The budgeting software program will also help you to establish goals that are important. One of the primary goals is to establish a fund that will cover approximately six months of your regular expenses. Over and above that, you will have funds for vacations, new auto, and a college fund for the children.
The program will also guide you in the best allocation of your income. Reducing and eliminating debt, especially credit cards, is of prime importance. Making these decisions isn’t always on your shoulders, a good family budget software program will lead you in the right direction to maintain your family’s financial security.
We mentioned earlier, a program that we recommend to all of our clients, that really helps to create a family budget, or for that matter, any type of budget. It emphasizes using your previous month’s income to cover the current month expenses, and follows the principle of giving every dollar a job. This program is called You Need A Budget, also known as YNAB.
If you’re able to create a family budget before a child is born, you’ll have an easier time, and will be better prepared for all of those unexpected expenses that arise while raising a child. You really can’t afford to make very many incorrect financial decisions for fear of placing your family in a bad financial position.
Having all of your finances in one place, when you create a family budget program, will enable you to get reports and see what you need to change if necessary. In addition, a glance will tell you if the money is on hand for future planned expenses or purchases. So, please don’t delay, check out this fine program and see what it can do for you.
Gust Lenglet is the CEO of HBS Financial Group, Ltd., an accounting & tax preparation firm in Maryland. He has more than 25 years of experience in the banking and financial industry. Gust started his career as a loan officer at a major national bank, and then moved on to become controller of a multi-state law firm. In recent years, he has written many financial articles that have been published on Ezine Articles and many websites.