Many Christian families get into financial problems simply because they do not have any idea where their money is going until it is gone. For today’s lifestyle keeping track of income and expenses, family budgeting is a necessity in order to have family financial peace. The basic fact you and your family need to understand is that a family budget is a long-term solution to many financial problems. It helps to give the family a solid financial future which will benefit all members. Proverbs 15:22 says “Without counsel plans fail, but with many advisers, they succeed”. No matter how confident you feel in your ability to achieve your financial goals, it is always a good idea to sit down and re-evaluate your household budget, to make some strategies how you will use your family finances.
What then is a budget?
A budget is a list of expenses and income. It is the amount of money that currently comes in and out each month or year. Christian family budgeting is simply a tool that allows you to see where your money is going and how better you can manage it. It allows you to monitor how close you are to your goals.
Luke 14:28-30 says, “For which of you, desiring to build a tower, does not first sit down and count the cost, whether he has enough to complete it? Otherwise, when he has laid a foundation and is not able to finish, all who see it begin to mock him, saying. This man began to build and was not able to finish.”
It is biblical to have a budget or plan set before embarking on a project. It’s a good way to achieve a goal and not get disappointed. When you are trying to put together a family budget, you need to make the right plan and strategies to ensure that your money is being spent properly. There are some huge mistakes that some people make which cause the budget to fall apart even before they really get staffed. In this article, we will discuss what these mistakes are so that we can avoid them.
MOST COMMON FAMILY BUDGETING MISTAKES
You can utilize this moment to assess your progress in achieving your financial goals from the previous year and start to set new goals that reflect your current financial situation. Always remember when planning your family’s budget to avoid making these key budgeting mistakes that can prevent you from achieving your goals:
Failure to make a plan
The first thing we must do in setting up a budget is to figure out things we will need to pay for on monthly or annual basis. This is the most important part of the family budgeting and if there are any surprises, your budget will be mined. So, make sure you remember all your bills. Such as newspaper delivery, dog food, insurance payment, car maintenance, taxes, credit card payments and the likes when planning a budget.
Falsely Identifying Expenses
It is easy to stretch the truth about what you earn and what you spend each month. When you and your family are the only ones checking your budget, being dishonest with yourself will get you nowhere when you ‘re twinge to achieve a goal. Be honest with yourself when you’re determining how much you spend in each of your budget categories. You cannot possibly stay out of debt if you’re not willing to see where changes must be made.
Not Planning for Emergencies
Always think about the unexpected things when planning. Saving for the future can protect you from years of financial hardship, although it requires discipline. When building your budget set aside small monthly savings that will serve as an emergency fund. You will be happy you have this money should an unforeseen event occur such as a medical emergency, a natural disaster or an auto accident. Keep your budget tight but also be ready for unexpected occurrences so that you can have family financial peace when it happens.
Spending More Than You Earn
If you truly want to live a debt-free life, then you need to cut your coat according to your cloth. Don’t spend more than you earn, rather make a conscious effort to live according to your budget. When you build a budget, you are definitely on the right path towards organizing your financial life which will help you achieve your set goals.
Comparing self with others
Most people go out of the budget because they choose to be what they are not. Some people are fond of competing with their friends on material things. Simply because your colleague or friend got a new phone or car doesn’t mean you should follow the trend. You don’t know if he/she has another means of income. Comparing your finances isn’t good for your family budget plan it might lead to incurring more debt. Create a good family budget plan and adhere to it strictly.
Never Updating Your Budget
Your income and expenses can change from year to year. Making the budget you create today might be irrelevant by this time next year. It’s however advisable to always update your budget by removing the ones achieve out and adding a new plan to it.
Thinking Budget is not necessary
Failure to plan might cause a financial breakdown. Some people believe they can manage monthly expenses and as well save some money even without drawing a plan. It might sound possible but is never the right approach to achieve your financial goal. If you never take the time to write out monthly expenses and savings from your net income, then there won’t be any improvement in your personal finances. Start making the right plan today, it’s never too late.
Dictating the Family Budgeting
It’s not ideal for one person to dictate or control the family budget or household funds. A budget is only effective when both parties communicate and agree on the terms, so take time to talk it out before putting pen to paper.
TIPS HOW TO AVOID FAMILY BUDGETING MISTAKES
Plan and Set Goals
The couple should sit and decide together on what they want to specifically achieve in the year and broadly, for the next 5 years. Do you want to save money, save for business, pay off bills, save for school, invest, purchase a new home or buy a car? If you write down your goals, you can then decide how your current income can be divided into certain areas to achieve your goals.
Evaluate your Current Income
It’s very important to create a list of all your expenditures such as bills, food, gas, car payment, mortgage, insurance payments, and miscellaneous expenditures. Make a note of when each payment or expenditure is due or occurs as well. Compare what your realistic income to what you actually spend each month. Then itemize all the expense as monthly bills. For instance, if any bills come up twice a year, you multiply the bill times 2 and divided by 12. If it is a quarterly expense, you multiply times 4 and divide by 12. If it is a daily expense you multiply it times 31. Then add up each item on your list. Now you know your monthly expenses. That is important for family budgeting.
Make Necessary Changes
Always check if your income is comparable to what you actually spend, if you have any money left or if you’re constantly operating in the red by shifting payments all the time to cover the next one due. Make the necessary adjustments by cutting out any unnecessary expenditure so that are able to live each month on your income. If possible, cut expenditures further so that you can begin to use the money toward at least one of your short-term goals for the year and at least one of the long-term goals for the next five years.
In addition, you and your family need to stay focused and committed to your plans and strategies. Let all family members be accountable to each other. Be vigilant about accumulating any more debt, about buying impulsively and about losing financial focus on your goals. You will be surprised at what can be accomplished in a short-term when you avoid all mistakes that could jeopardize your financial freedom.
Related article: Family Fund: Should couples merge all their money?