Today’s personal finance hack is related to getting your family members on board the household budgeting process.
Making financial budgets it a critical part of wealth management and there are lots of budgeting hacks that can help you take control of your money. We are specifically going to discuss the idea of involving your family in the household budgeting process for the sake of ownership.
If you have a family that you provide for, and feel the money often vanishes into thin air during the course of a month, then it may be time to sit down and make a household budget. This is because a household budget will help you understand the flow of money and offer opportunities to curb wastage.
One of the ways to lower your household expenses is to change the lifestyle followed by your family, and they may or may not be open to such changes, and the following tip may help you deal with the possible reluctance:
Involve your family in the household budgeting process to keep them in the loop and to develop a sense of ownership, making it easier for them to accept lifestyle changes required to save money.
If you collaborate with your family as a team, instead of following a dictatorial approach when announcing lifestyle changes that result from the budgeting process, you will be less likely to face aversion. Communicate with your children, significant other and parents (if you support them too) that the financial budget will impact their lifestyle and you need their support to ensure the financial well-being of the entire family, or to meet financial goals that impact various members of the family. If you wish to curb household expenses, certain lifestyle changes may have to be made, such as:
- Cutting the cable,
- Limiting monthly allowances,
- Reducing the number of monthly outings, etc.
If your family feels involved in the budgeting process and takes ownership of the collective effort to save money each month, they will find it easier (or less difficult) to accept these changes.
Of course, you must first determine the level of participation that is suitable for your family members, depending on their ages and current level of financial maturity and understanding. For instance, your 8-year old child would understand less compared to your teenager, so you may have to customize the kind of financial information you share with them.
Further reading: Teaching children about money – Consumer Financial Protection Bureau