How to Plan a Home Budget
Updated: Feb 9, 2022
There are a few questions that come up when we talk about the importance of planning a home budget, like: · How do we pay down debt? · What if we don’t have enough money? · Why would we want to restrict our lives with a budget? · How can a budget create financial stability? · How do we teach our children about responsible finances? These are all great questions, and we will get to all of them! First, let’s talk about our financial mindset: Many people (especially if they are young adults) can look at a budget and see it as being restrictive. Budgeting seems like another chore to be done, in a long list of chores, that keeps them from having fun. Part of this is due to the simple fact that their brains haven’t finished developing! It’s hard to look into the future to see where our choices might lead when our brains are still so squishy. This is normal for the age range of late teens – mid-twenties, and we can (and should) expect to see some foolish decisions during this time. Millennials are no longer the “youth culture” generation (sob!), but we definitely have financial struggles that we need to overcome. Gen Z is doing slightly better as a whole, with a higher savings rate across the generation, but there are still plenty out there who are making some really financially foolish decisions when it comes to long term stability.
While budgets DO place constraints on where and how we spend our money, those constraints give us the ability to have greater freedom overall. Freedom from debt is the first that comes to mind. Freedom from the mental and emotional load that comes with excessive debt. Freedom to take trips when goals are met. Freedom from panic when an unexpected expense arises. They say fewer than 40% of the adult population in the US can handle a $1,000.00 emergency. Which means the majority of Americans are just one small step away from financial ruin. Keeping a budget may put off some short-term pleasure, but it can provide long term peace of mind! The first step to creating a household budget is to sit down together as a couple and honestly discuss our financial goals with each other. This can be hard, and even feel a bit threatening since many arguments in a marriage revolve around money, but it is an essential part of the process. If you’re not on the same page and working towards the same goals, then you’ll be pulling in opposite directions, and nothing will build up resentment and frustration faster than feeling like you’re working against your partner’s bad habits. Figuring out goals that you both want to accomplish, and then setting up a plan for working towards them, is a great way to grow together as a couple and learn to work in unity with each other. (Side note: if you’re not currently married, but just dating, discuss financial goals early on to see if you both can be on the same page. If you can’t, then it may be better to move on to a different person who has similar goals to your own.)
Creating a household budget takes time and perseverance, especially in the context of a marriage relationship, but it is worth the time and effort. If financial discussions tend to cause strain and discord in your relationship, then take some steps to work through that as a couple. Unpack what’s making each of you fractious, and then be patient, forgiving, and understanding as you work through it. Start with a smaller aspect of your budget – like fun spending, the food budget, or even household toiletries – to get comfortable with working together before tackling the entire budget as a whole. When we create and stick to our budgets we can eliminate causes of discord in our marriages, and have more peace in our homes! This is part one of our newest series, How to Plan a Home Budget! This month we’re going to be talking all about what a budget it, where it influences our lives, when we need to take some risks, and why it’s important! We’re also going to talk about how it will help us with our long-term goals, and how to divide financial responsibilities between the family.
Part Two: How to Make a Household Budget Plan
Part Three: 8 Steps to Pay Off Debt Fast with a Low Income
Part Four: How to Supplement your Single Income