News, insights and advice
from our experts.

We offered tips recently on how to help your family’s budget cope with the country’s current inflation worries.

We used the term “budget” in that post, but that term sounds harsh; it’s a word that many of us believe means “hardship,” “scarcity,” or “I don’t have enough money.”

But another word for budget is “spending plan.”

This is a much nicer word: it connotes, “I control what I choose to spend my money on.” 

It’s also a “plan,” and many of us look at that term as one that helps us reach our goals. And since almost all goals are those we want to achieve in order to improve our lives, a “spending plan” can help us reach the goals that mean the most to us as we improve our lives. 

You ARE in control as you create your family’s spending plan.

A spending plan isn’t something to beat yourself up over should you not follow it. Instead, it’s something to celebrate when you do meet it.

And it can be as strict or easy-going as you wish. Again: YOU get to choose what you PLAN to spend your money on.

How to create a family spending plan:

Get the adults all in one place.

Everyone who contributes to the family’s financial kitty needs to be in this meeting. This also should include adult children if they live at home and contribute to the family’s finances and possibly even high school students if they have after-school jobs and you wish them to understand “where the money goes.”

It would help if you also gathered adults – such as in-laws, uncles/aunts, cousins, parents, etc. – who don’t contribute financially but live with you. They may not contribute financially, but they may contribute in other ways: free child care, home and lawn maintenance, etc. 

Your spending plan won’t work if everyone who brings money in or spends it doesn’t agree on spending priorities. 

It’s a good idea – even before you even start looking at “your numbers” – that everyone feels free to discuss what’s important to them when it comes to their needs, goals, and wants. 

Try hard not to shame anyone for what they feel is a need. The idea is just to get together and discuss what your family spending plan needs to cover, what it should cover, and what it would be nice to cover.

The actual decisions about needs, shoulds, and “would be nice” can come later.

• Discover your total household NET monthly income.

Anyone who contributes to the family’s budget should bring their pay stubs (or look them up online) to see what they bring home each month after taxes. 

If you have more than one job or a part-time job, include that in your monthly tally.

• Find your total monthly household expenses.

This should be as thorough as you can make it. What do you spend on housing, food, car payments, car repairs, gasoline, utilities, clothing, recreation, and, of course, on “fun” (however you define it?)

If necessary, before this meeting, ask everyone to write everything thing down when they spend money for a month. This is difficult but necessary. (If your bank provides online account statements each month, print three months’ worth out and bring them with you. It will give you your quarterly income and spending amounts, which you can then average to a monthly income and spending.)

• Decide on your monthly savings.

You must put aside some money each month. Cars break down. Jobs can be lost. You want to take a week’s vacation.

Therefore, you’ll need to have some money set aside every month to add to this emergency/fun fund.

Place this amount below your list of expenses.

• Figure out how much you have leftover to spend.

Once you’ve considered ALL of your monthly expenses and income, you’ll have a clear picture of how much money you have to work with. 

You can now break your finances down into weekly spending (all expenses, plus amount of savings to put away plus how much you can spend on “fun”).

You could also do this monthly, although many of us find that we end up spending too much at the beginning of the month, leaving us not enough at the end. 

There is no perfect way. The only way to determine “success” is if you can pay all of your bills, your needs, and wants and have a little leftover at the end of the month. (While it is best if you can put a few hundred dollars away each month into savings, even just a small amount adds up over time.)

• Make changes until everything “fits.”

The money you bring in should cover everything: expenses, needs, savings, and wants/fun. 

If you find you run out of money before the end of the month for any category, you’ll need to make adjustments. 

Perhaps you’d like to spend $300/month on “fun,” but you discover that you’re often “dipping” into that fund to pay for needs and other “must pay” expenses. Yet you’re still spending $300 per month on fun.

You may have to rethink how much you can spend on “fun” each month.

Of course, you don’t have to: a spending plan is entirely up to you.

But if you’re constantly finding that your fun (or another category) is leftover while bills/needs are being paid via credit card or not being paid at all, some adjustments must be made.

An important note: you may have noticed that we don’t mention that you can tap into your “savings” fund to pay for your expenses or even fun funds. This is because we absolutely urge you to always put something away in savings and leave it alone only for emergencies. 

In other words, you’re spending priorities should look like this: essentials/needs, savings, and then – and only then – fun/wants. 

Many people take on second or part-time jobs to help fund their savings and fun funds.

Hire Dynamics has many temporary full-time and even temporary part-time/seasonal positions available for people who need more money for their spending plans and to put more savings/fun money away.

Looking for your next job? Whether you’re searching for forklift jobs near me, warehouse work, or just any job near me hiring. You’re in the right place!

Check out our current opportunities and make sure to register with us so that we can contact you quickly when a position that suits you opens up.