Top 5 Mistakes People Make When Creating a Family Budget

Creating a family budget can be difficult because you have to take into account so many different people and their needs. Unlike a regular personal budget, you have to find a balance between everyone. There are more variables in building a family budget spreadsheet that you don’t have in other budgets.

You need to be sure to make a thorough list so you can account for every expense.

1. Forgetting to Factor in Fun

Don’t leave out the fun. It is so easy when putting together a family budget to forget the fun things you want to do as a family. You need to put a line item in for various travel expenses, outings and even dinners out. As a family it is important to have time to bond, this means handing out the money to do the fun things, which means it needs to make it into the budget.

2. Not Leaving Room for Surprises

All budgets need room for surprises, but family budgets need to cover surprises from every angle. Children sometimes have unknown school expenses, extra-curricular activities and even outings with friends. You don’t want to deny someone in the family a great opportunity because there isn’t room in the budget for it. This is where many families put things on a credit card, but if you use a family you can find a way to cover the expense.

3. Not Contributing to Savings

You need to put a line item in for savings. If you do not include savings in the budget, you won’t be putting money away. Even if you cannot put an extensive amount away each month, you should work to put something into savings. This helps give your family a sense of security and a bit of a safety net. If you can afford to put a large amount away, consider using a percentage of it for family vacations. Your budget plan needs to take care of many things.

4. Not Tracking Actual Expenses

Busy parents often feel overwhelmed. It is easy to forget to track all actual expenses. You won’t know if you are succeeding with your family budget if you do not track your expenses. You need to start living on a budget and examining your income regularly alongside your spending to see if you are staying within your limits. This also helps you move money around to other areas to make your quality of life better. The more closely you keep track, the more diligent you can be about keeping up with your savings goals.

5. Forgetting About Interest

It is easy to forget that putting something on your credit card costs more than the initial price. If you do have to put something on your card, you have to include the interest in your budget. It counts as expenditure and you need to know the money is going there to cover the interest. By making it a line item on your family budget spreadsheet it will help discourage you using debt as a backup, and you will quickly see how it adds up.

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