Family & Money: Why Setting a Budget is Important

While it’s true that many young people are looking forward to starting their own family, they’d be more careful to plan things out if they knew how difficult it can be to manage. Being married is one thing, but having kids is another. Between making sure your children go the right college, have the proper clothes, and are well fed, these are only a few things to keep in mind.

Speaking of which, what do all three of these relate to? They’re all important when it comes to setting a budget for your family. Clothes can be costly and some schools can be very expensive. As for food shopping, you might not always be able to buy what your children want, but you should always be sure to meet their needs. With that said, what are some reasons setting a budget for your family is important? Here are a few things to consider. First, track your expenses with Personal Capital.

#1. You’re Setting an Example

One reason setting a budget for your family is important, is because in doing so, you’re setting a good example for your children. Kids often take after their parents, and even the smaller habits that you do, they might pick up on. For example, let’s say you were a parent who always bought your kids the most extravagant gifts during Christmas. That’s not to say there’s anything wrong with giving your kids gifts for Christmas, but it’s what you buy for them that might make the difference. As another example, let’s say you were at the store with your children and you bought whatever looked appealing to you, even if you didn’t really need it. When your kids get older, they might adapt a similar mindset.

#2. It’s An Exercise in Self-Discipline

Another reason why setting a budget is important, is because it’s an exercise in self-discipline. After all, I’m sure we’ve all that moments where we were out shopping, and only intended to buy one thing, but ended up purchasing unnecessary items. Self-discipline gives you a chance to save money by buying only what matters for your family. When food shopping for your kids, for example, do you focus on what meals you’re going to fix during the week, or do you spoil them rotten with junk food? Second, a family budget also keeps you self-disciplined in your finances as well, especially when dealing with taxes and paying the bills. If you know you have the pay the electricity bill in a few days, and yet you want to take a trip to the movies, what’s more important? Overall, a family budget keeps you focused on your finances, and helps you make smarter decisions about spending your money.

#3. Gives Your Children a Better Understanding of Finances

When your whole family is involved in the budgeting, it gives your children a better opportunity to understand how money works and to avoid the potential snarls that can impact privileged teens. Not to mention it allows them to make smarter decisions in the future. Even though parents normally handle the finances, have you ever thought about sitting down with your entire family and having a discussion? If you’ve recently started giving your children an allowance, have you thought about explaining to them how it works? After all, they might be tempted to spend it all in one sitting at the mall.

Overall, these are some reasons why setting a budget for your family is important. Aside from setting an example for your kids and being an exercise in self-discipline, it also gives your children a better understanding of how finances work. The next time you’re budgeting for your family, take these tips into consideration.

Learn more for more information about the essentials of family & money.