Why Should You Budget as a Family?

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shotcaller

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Ah, yes. Today, we will talk about the dreaded “b” word – budget. The family budget, to be more specific. It’s a word that inspires disdain and dismay. It’s not an enjoyable activity at all.

So why should you create a budget for you and your family? Why do we need it so badly anyway?

Back when I was small up until I entered college, I thought that budgeting things was strictly within the jurisdiction of “adulting.” I guess it was the result of watching my mom countless times as she sat hunched over the kitchen table, punching the keys of her calculator and furiously scribbling down notes on her kitchen ledger. It looked like such a severe and not-fun thing to do that I thought nothing of it until I got married and had kids.

Today, I’ve thankfully learned the importance of having a regular budget for the entire household. It may be a bit of a hassle to do, but the pros definitely outweigh the cons, as I will be illustrating in the five points below.

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It helps you become (and remain) debt-free

Nobody wants to be in debt. But the reality is a lot of us live with mortgages, credit card bills, college, and personal loans, etc. And all of them have to be paid one way or another.

I realized that having a budget can help me and my better half become debt-free. A percentage of our combined incomes goes to our savings, another goes to bills and household needs, and yet another goes to paying our debts in increments. We have mapped out a five-year plan to become completely debt-free – and so far, so good! We’re slowly but surely getting there, thanks to our monthly routine of setting some money aside.

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You can make the most of what you have right now

Sticking to our budget has made me appreciate the stuff my family already has. Our monthly budget allows me to see the things we can and cannot afford. For instance, we have always wanted to splash out on a dream camping vacation for the entire family. But when we computed a potential budget for an all-weekend getaway to somewhere rustic and forest-like, we discovered that we couldn’t afford it – yet. So my wife helped me plan the next best thing, which is to set up a backyard camping experience for all four of us, complete with roasted marshmallows and spooky stories! It had all the fun and entertainment of a glamping trip minus the high price tag.

So make the most of what’s already there. It’s just a small matter of being mindful, creative, and grateful in equal doses. You can do with what you have in the meantime while saving up for what you’ve always dreamed of to have soon.

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It helps you achieve your financial goals

I’ve mentioned that being debt-free is one of our financial goals. There are more, though. Another one is to have a substantial “crisis” fund we can use for unexpected expenses like accidents, medical emergencies, and other unforeseen events. I don’t like the thought of having to take out a loan to address these things no matter how urgent they are. My personal calculation for this particular need would be at least four months’ worth of income between us. With a budget, we can see how near we are to achieving that calculation.

In the grander scheme of things, we also have financial goals dealing with our kids’ college funds, exotic vacations, our retirement, and other plans that unfold as the years go by. Having a budget helps us see how close we are to getting our emergency fund filled up, and if we can accommodate even more goals while that is happening. In turn, it keeps us relatively worry and stress-free as parents and spouses.

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You can go shopping without the guilt

Not having a budget can make you a spendthrift. It gives you a false sense of the notion that you still have money left over for frivolous things. Believe me – this has happened to me (and several maxed-out credit cards) before, and it’s embarrassing! I always keep overestimating the money I think I still have in my account, and that pushes me to shop like there’s no tomorrow.

Sticking to your budget not only gives you peace of mind that you won’t be facing debt and getting broke. It can also give you the freedom to buy stuff without wondering if you can or can’t afford them. So go ahead and splurge minus the guilt, if you must – as long as your budget allows it.

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It helps you become more generous to others

This may be an unexpected entry in this list of logical reasons to have a family budget. However, I believe that when your basic needs are met, and you are sufficiently fed, watered, and happy, you become more generous and giving to others. Enough savings means you can have some money left over to spend on others so they can get their needs met or be surprised with a loving gesture (such as small gifts or a surprise visit).

There are times when people in need approach us, and it gives us such a good feeling that we are able to help them in any capacity we can. We also set aside a percentage of our savings every month to donate to charities of our choice. We call it our “personal CSR” (corporate social responsibility), which is our way of paying things forward for finally being able to work towards our improved financial duties.

The verdict?

So those were my top five reasons why you should create a budget for you and your family. There are so many other reasons to start one, and they are all usually the result of becoming financially responsible. If you have some of your own that you would like to share with us, please go ahead and mention them in the comments section.

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