Developing a Family Budget

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Inspired by a conversation I had with a close friend yesterday, I decided to broach the subject of family budgets.  TD Bank Financial Group reports that Canadians’ personal debt has tripled over the last thirty years (see report).  Yikes!  Of course, many factors come into play in these statistics; however, developing a budget is an easy way to start building healthy spending habits.

For years I spent my earnings without any budgetary guidelines.  Of course, I always knew how much money I had left in my bank account, but my approach was rather short-sighted.  If I had the money, I could buy what I wanted.  If I didn’t, I couldn’t.  Of course these remain simple rules to live by, but this practice sometimes left me in a position where I was unprepared for life’s incidentals.  Of course, once Father Miser and I got together, I was taught how to develop a personal budget.  And, since having children, we review our family’s budget on a quarterly basis.

While most of us live paycheck to paycheck, it is possible to plan ahead to best manage the funds that we have.  As Father Miser often says: “fail to plan, plan to fail.”  This is definitely one of the most annoying sayings to have thrown at you when you are struggling to keep your head above water, but it does present some undeniable truth.

How you develop your budget all comes down to personal choice and habit.  If you are generally good with your money then maybe a loosely-planned annual budget is all you need.  But, if you are trying to crack down on bad spending habits, then maybe it is important for you to input every single expense into a program or spreadsheet to balance your budget at the end of each week or month.

The important thing is that you take the time to discuss your finances as a couple.  While money is not always the most pleasant thing to talk about, it is necessary.  The more you plan your spending and savings, the less stress it may cause in the future.  Make it fun!  Sit down together one evening, light a fire, pour a glass of wine and soon you’ll see it’s not as bad as you thought.

If you are interested in a simple and straightforward annual budget spreadsheet, check out the template I use: Family Budget Spreadsheet.  It might list some things you would not have thought to include.

Have fun!

MM