Priorities Bring Focus to Family Budgeting - Often, family budgets are a source of conflict. Most of the time, the main earner makes the final financial decisions, which isn't always a welcome deal for the others. Since money is an intrinsic part of family life, families need to come to an agreement on this aspect. There is a four-step cycle in budgeting family money to maintain peace and harmony.
1. Set your priorities.
Priorities differ from goals. They are aspects in your family life that you, as a family, want to focus on, say the health or future of the children. While goals are specific targets that support priorities.
In setting priorities, do not be too much because it will derail the goal. Ideally there should only be one, but since life isn't ideal, 2 to 3 makes sense.
When priorities are set and agreed upon, write them down. Post a newspaper where everyone can see it to remind them of your family's focus over the next few years.
2. Make a list of your goals.
Once the family has set and agreed on priorities, the next step is to set goals. Goals are specific and measurable conditions that, when achieved, will support priorities.
In setting goals, set targets that are both challenging and achievable. 10-15% of family income is a good savings target for children's future education: stretchable but affordable.
Try to limit your family to 1-2 goals per priority, to maintain focus.
3. Work towards your goals.
Once you've set your priorities and goals, start living them. All family activities will be directed towards achieving your goals. Track progress, especially on financial goals, using income and expense tracking tools. The simplest way is to get a notebook and record all expenses and income and set a budget for future expenses. Some invest in computer software or family accounting. Whatever it is, the important thing is that there is a family performance monitoring system in achieving its goals.
4. Evaluate your family life.
At some point in time, when you feel it's time to evaluate your life, examine how your family is performing against those goals. Goals that have been achieved can be crossed off the list, and new ones can be formulated.
Sometimes, in a major change, say a career change, or when a family member leaves, it may be time to reevaluate priorities. When such a moment comes, then the cycle begins, what is its purpose: to live!
