Family budgeting tips to stay on top of your finances

Tracking expenses is challenging, especially when unexpected costs pop up

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When financial expert Tom Snyder coaches people about how to budget, he starts by encouraging them to track their spending.

“If we don’t track, we don’t know when to stop spending,” he says.

The retired engineer in Michigan says that it’s easy to be bumped off track by irregular costs, such as birthday gifts or vacations.

Successful family budgeting is all about staying flexible so you can handle those irregular costs as well as unexpected challenges, including sky-high grocery store prices or rising interest rates.

Financial experts like Mr Snyder say that by using creative methods to control a budget and trim costs in some areas, you can generally still find ways to spend on what is most important to you.

Follow your rhythm, not rules

Severine Bryan, a personal finance educator and coach based in Atlanta, says a budget needs to stay flexible and constantly adjust to challenges.

One of the biggest mistakes people make, she says, is thinking they have to follow a set approach, such as the 50:30:20 budget.

Ms Bryan likes to track her spending with spreadsheets, but her college-going daughter prefers a more creative approach with visuals and graphs. They each use their preferred method, then communicate about spending when necessary.

“It has to be a method you enjoy so you want to use it all the time,” she says.

Factor in variable expenses

“The default view of budgeting is annual, but I think that can be frustrating because it’s really hard to have a perspective on your entire year in one sitting,” says Charlie Bolognino, a certified financial planner in Minnesota.

Instead, he suggests starting with a month-by-month approach, then taking time to layer in the less predictable costs, such as holiday expenses.

“We’ll never catch them all, but we want to reduce surprises as much as we can.”

Mr Bolognino says that while big expenses such as housing and childcare payments are often fixed, other costs, especially food, fluctuate much more.

While that means food costs can be high during months you are hosting dinners or going to restaurants, it also means you can trim them by planning meals and targeting discounts at grocery shops.

Team up with your partner

Being in sync with your partner is an essential part of the budgeting process, even though it can be one of the hardest parts.

Instead of rehashing a money disagreement, plan your future together and get excited about joint goals, Mr Bolognino suggests.

Those conversations, he says, can strengthen a relationship because “it feels like we are aiming for the same thing”.

In his case, he stopped criticising his wife about her coffee-buying habit when he realised it didn’t add up to a significant expense.

Decide what’s really important

Cara Macksoud, chief executive of Money Habitudes, a money personality assessment company, says she, her husband and five children first decide what expenses are non-negotiable.

In addition to food, that might include costs related to sports or private lessons, for example.

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From there, Ms Macksoud suggests creatively meeting those needs by choosing less expensive options.

If going on vacation is important to you, perhaps what’s most critical is being together somewhere away from everyday demands.

Her family, who live in Venice, Florida, opted for a road trip together, planned partly by her children based on places they’d seen on Instagram.

“We did crazy, off-the-beaten-path things,” she says, such as visiting White Sands National Park in New Mexico.

Take advantage of community resources

Erin Voisin, a certified financial planner and managing director at EP Wealth Advisers in California, says she has saved hundreds of dollars on toys for her children by picking up items from local mums' groups and “buy nothing” groups.

“I don’t want to pay full price, so I join groups that post flash deals or giveaways,” she says.

Ms Voisin has found her children’s holiday and birthday gifts from giveaways shared on those community social media pages, including a large Hot Wheels garage set that retails for more than $100.

She has also found ideas for free activities from Facebook groups, such as taking your children to a pet shop to look at the animals.

“Prioritise the roof over your head, food, a way to get to work and utilities,” Ms Bryan says.

“Everything else will fall into place.”

Updated: March 03, 2023, 5:00 AM