5 tips to help you create and follow a family budget

When you have a family, it’s important to keep tabs on your finances and make sure you are spending wisely, building up your savings and safeguarding their financial future.

When you develop a habit of living on a budget, you can review where your finances are in comparison to where you’d want them to be – and make the necessary changes before it’s too late. Listed here are 5 actionable tips to help you create a family budget and stick to it.

1. Make a list of your important expenses

Start with the basics. It might sound boring but this first step is essential when creating and planning your budget. List down all your monthly expenses as a family – from utility bills to groceries to school fees to your child’s extra-curricular activities. Include everything you – and your family – spend on a daily/ weekly/ monthly basis. This becomes your baselines expenses – you can now determine how much money you have left each month to spend on entertainment, family dinners, ad-hoc purchases or to put away into your monthly savings.

2. Always have an emergency fund

This is extremely important. Life is unpredictable and emergencies don’t give you a warning. Be it a broken boiler in the middle of winter that needs to be repaired, an illness that requires hospitalisation or medical treatment or your car suddenly breaking down, if you have an emergency fund, you will be more in control of your finances and less stressed during times like these.

However, there might sometimes be occasions where you will need more money than is in your emergency fund, and for situations like those, taking a loan to help you tide through can help. Just make sure that once things are sorted, you pay off the loan in the respective time period to once again stay on track of your expenses.

If possible, your emergency fund should be enough to cover about six months of your family expenses. So even if you lose your job, you will have sufficient money to tide through in the interim.

3. Know the difference between ‘needs’ and ‘wants’

Knowing the difference between what you actually ‘need’ versus what you simply ‘want’ is not just a lesson in budgeting, but an essential life lesson as well. And one that you must teach your children too.

In this day of instant gratification and getting everything with a simple click of a button, it’s easy (and tempting) to get confused between one’s needs and wants. While previous generations had to wait days, even months for certain things, today’s kids get almost everything on demand and at the tip of their fingers. Teaching them this important distinction from an early age will help them be more responsible with money, saving and budgeting.

4. Swap branded names for supermarket own versions

Following on from the previous point, when you are living on a budget, every little counts and small changes can make a big difference. Case in point – your weekly supermarket shop. How often do we pick up the branded versions of daily staples, just because the names are familiar and advertised everywhere? Or because we assume they are better quality just because they are branded and more expensive?

Sometimes, a little effort and time will reveal that the supermarket own versions of products are just as good (and sometimes, even better, made with simple, clean ingredients) and cost you a fraction of the price! A small change but when you do it week after week, it adds up and helps you keep your budget on track.

5. Review your budget from time to time

In time, your family’s needs change. Salaries change. Expenses increase or change. Which is why it’s essential to review your budget every few months or at least annually. Take note of an increase (if any) in your baseline salary. Then review all your essential expenses again – have grocery prices or school fees increased? Is your child still doing the same extra-curricular activities as last year, or any additional ones? Is there anything other ‘expense’ that has become a regular expense in your household? Reviewing your budget every once in a while helps you stay ahead of the budgeting game.

While budgeting can seem daunting at first, it’s a great way to keeping your family finances secure. Having a budget – and learning to stick to it – stops you splurging on things you don’t necessarily need.