Family Nature

Family Finances. Budgeting for a family of six.

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Family finances can be kind of scary.  Why is that?  I guess sometimes it means facing reality.   It means taking responsibility.  For years we’ve managed okay without actually sitting down and working out a family budget but recently we’ve felt the need to gain more control over our finances.  

My good friend MoneyGal, who does our taxes and knows more about family finances that I ever will, suggested a while ago that we come up with a family budget.  Why it’s taken me this long to actually do it, and why I’ve never budgeted ever before in my life is another story, but let’s just say that I’m a fool and leave it at that.  Anyway, I’ve been entering all our grocery receipt totals in an excel spreadsheet, keeping all my gas receipts in an envelope in the van and tracking every expense that I can think of with the Google Docs Family Budget Planner.  (If this link doesn’t work for you try doing a Google search for “Google Docs Family Budget Planner”.)

Some things were easy; I just copied the amounts from our household bills into the budget.  Other things took more thought; how much do we spend per month on clothing?  No idea.  Some months we spend nothing, some months we spend a lot.  Entertainment is another tough one.  I just had to guess at some numbers and will play around with them as we go.

It’s actually very interesting to sit down and look at how much money you spend on things per month, and per year.  We spend how much on cell phones per year?!  Aak!  How much on cable?  Ouch!  That much on our home phone?  Egad!  Some of these numbers are very surprising, and it really makes you think.  Regardless of whether or not I can afford it, do I want to be spending that much per year on cable?  Maybe not; the point is that I’ve never actually thought about it before.

So, now that I’m actually thinking about it, I’m trying to be more conscious about how much I spend. Take grocery shopping for example: when we’re careful we’ll spend $900 to $1000 a month on groceries.  It’s almost turned into a game; how little can I spend, what store has what on sale?  I find myself really reading carefully the price tags on the shelf; you know the small printed numbers underneath the price that tell you the price per 100g (or whatever measurements that item uses)?  I find myself comparing prices and brands obsessively.  I’m turning into my parents, for crying out loud!  It’s not like we were extravagant grocery shoppers before; we’ve always kept our eye on prices and sales, but I just try to be more mindful now.

So I sit here wondering, do most families budget?  Or, do most of them do what we were doing: flying by the seat of our pants.  Is it just me, or is this kind of a taboo subject?  People don’t really talk openly about finances.  In admitting that I now have a family budget am I somehow revealing something negative about our financial situation?  I don’t think so.  I think budgeting is a smart thing to do, no matter what your financial situation.  I just wish I’d realized that years ago.

Image from flickr by SMN

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10 thoughts on “Family Finances. Budgeting for a family of six.

  1. TheFeministBreeder

    I created a budget spreadsheet (very similar to the one on Google Docs, but I’m an excel expert, so I created it from scratch) about 2 years ago. Before that, I had no idea what was going on with our money. Money came in, and money went out. My husband was in the service industry and made most of his money in cash tips, so I didn’t really know what we were bringing in. Then one day I found out that my husband was paying credit cards with other credit cards, and it was all because he didn’t want to tell me how screwed we were. After a near-divorce fight, I decided I would never ignore our finances again.

    We have stuck religiously to this budget for nearly two years, and thankfully our debt-to-income ratio has improved significantly because of it. We put at least an extra $800 month toward credit cards. There was a time in the beginning where we were forced to live on $100 per paycheck (two weeks) for family groceries, but as things eased up, we now spend more like $400 a month (family of 4), and we have a little money left over to see a movie or buy a new pair of jeans if we want. I’m still trying to use every spare penny we have to pay down credit card debt so we can get a better interest rate when we decide to buy another house, but some months we decide the money would be better spent elsewhere.

  2. Lisa Marie

    Great thoughts. I’m SCARED to budget…. I’ve been WANTING to do it for so long, but I just get overwhelmed! Thanks for sharing your resources! Going to try…. again. 🙂

  3. Alexandra

    I *do* think that finances are kind of a taboo subject for families, and I truly wish it wasn’t so. Wouldn’t it be great if families (me included) felt totally free to share with other people how we are handling our finances; what is working for us, and what is not; and get support, advice, information and tips about how to create what works best?

    One of the most interesting books I ever read about personal finance and building wealth is “The Millionaire Next Door,” by Thomas Stanley and William Danko. This book, about self-made millionaires (as opposed to people who have inherited wealth), sets out some of the habits of wealthy people – people who live relatively unglamorous, but abundant lifestyles. Those habits, as it turns out, including “living below your means” and “creating and implementing budgets.”

    So, instead of thinking that “budgeting” is something that only people with money scarcity do, I know that it is something that people who have abundance with money do. I know I am likely in the minority, in that I find budgeting fascinating. But it seems to have a long-term payoff, too!

  4. Bev

    I find it really hard to look at our family finances. Seriously, there are months where I pay bills without looking at our account balance because I know I’m going to start hyperventilating and I can literally feel my blood pressure rising and it usually leads to an argument about all those interact withdrawls for foolishness.

    You have inspired me to take a good long look at the way we spend money pretty frivolously.

    Alexandra…I need your help!!!

  5. Rebecca

    We budget, but, my husband is an accountant so it’s in his nature! I would be awful at it but luckily, he keeps things in check. And it really is helpful to do – it makes you think about habits and what’s really necessary or not.

    The first start is to keep track of things for a month and go from there, but it stresses me out still!

  6. BarbaraH

    I’ve just recently started talking to others about family finances. It seems to have come into vogue or something with these “tough economic times”. I think that part of the reason that it’s not discussed is that it has a measure of guilt attached. Like if I could just control those rampant (ahem… female) impulses then I could get this thing under control.

    We’ve started having State of the Union meetings after each paycheck. We have a money worksheet (created by dh) which is constantly updated with upcoming bills and due dates and lets us see exactly what we have to spend. It gives me a much greater sense of control and involvement. I admit that I was feeling like I was living like a 1950’s housewife where bills are paid and allowances doled out. The resentment settles when I feel like I can see the greater financial picture.

    Now I take great pride with the money saved by bringing clothing to the consignment store, buying used rather than new and cruising freecycle.

  7. familynature

    @TheFeministBreeder: An excel expert, cool! Us common folk have to use the google budget, LOL. Thanks for your honest comment. I wish people would talk about family finances more often.

    @Lisa Marie: Go for it. It IS scary but once I did it I felt better knowing. I feel like I’m in control now! I’m sure it will be the same for you.

    @Alexandra aka MoneyGal: Let’s do it then! Let’s start sharing what works and what doesn’t. Let’s make finances okay to talk about!

    @Bev: I know exactly how you feel! Breathe sister, breathe.

    @Rebecca: Thanks for your comment! I’m trying not to let it stress me out anymore. I am aware of it and working on it, and that alone makes it less stressful.

    @BarbaraH: Yes, I think you’ve hit on something: guilt! I love the idea of “State of the Unioin” meetings. Great idea!

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