Improving Your Family's Financial Health

August 10th, 2011

In my last post, I focused on improving the financial health of your church through sound budgeting practices. In this post, I’ll share some sound budgeting practices for the family.

Do you have too much month left at the end of the money? Sometimes the “too much month” is a result of not having enough income or having bills that cannot be paid no matter how much you cut costs. But for many of us a lack of organization and commitment to a budget means that you aren’t taking charge of your finances and are allowing them to take charge of you. Here are 3 steps to take to improve your family’s financial health through better budgeting.

1) Identify all of your expenses. On paper (or software application). ALL of your expenses. If you don’t have a category for an expense (morning lattes, Redbox rentals) then you need to create one. One of the easiest ways to lose track of your budget is to let little expenses sneak in without allocating money for them.

2) Allocate all of your income. On paper (or software application). Every dollar and cent of income should have a home in your budget. If your expenses are less than your income, then the difference should be allocated towards other areas such as saving, giving, and “fun” money.

3) Make your budget a month at a time. You get the idea. You (and your spouse if you are married) should have a monthly budget discussion at the end of each month to discuss the budgeting successes or challenges of the month and to plan for the next month by making adjustments as needed. Budgeting by month is usually the right length of time to avoid having too many meetings while not taking too long in between meetings to let spending get off track. It is very important that you and your spouse be on the same page each month! Think of the budget as a contract between the two of you- neither of you is to spend money without agreeing to it beforehand.

Budgeting will become easier after the first few months. If you haven’t used a written budget before (you will notice that every step should be done... on paper!), you will be amazed at how a little organizing and planning coupled with the willpower to stick to the budget will make a big difference.

Extra tip: Ever wonder how to budget for irregular expenses like insurance payments and property taxes? These need to be accounted for in your monthly budget and you can do so by setting aside a portion of each of these expenses every month. For example, if your car insurance payment is $420 every six months, then set aside $70 each month (420/6=70) so that you are actively building up funds to pay for that expense when the time comes.

Lindsey Foster Stringer is an education analytics expert by profession and a financial coach by ministry.

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