You're Not Alone
While many people do a good job of budgeting, some people wind up with poor savings or more debt then they can handle. Humans just don't come with built-in budgeting skills. Fortunately, those skills can be learned. Learning about good budgeting can help improve one's finance skills.
The major keys to money management are simple:
- learn about financial planning concepts,
- learn about budgeting,
- create a plan,
- save properly,
- spend wisely and
- stick to the program.
Tips on how to deal with money
Money and (over-)spending are major influences in our daily lives. You might be able to manage your finances on your own but most people start hitting walls when they start a family. It is rare that all members of familiy have similar spending habits. Therefore, it makes a lot of sense, if discussing and agreeing on (!) some basic budgeting targets becomes an integral part of relationships.
Many families exerience major issues with money because there are simply more people to take into consideration; more people to plan for and more people that sometimes have quite different needs. Problems can cause major rifts in families and even breakups. Therefore it is such a good idea to make your financial budgeting an important part of your general family planning and organization.
Here are a few tips to manage your money
1 - Allowances
One way to alleviate some of the stress is to give allowances. This way everyone can spend the way they want within the allowance and aren't constricted by the family budget. This simplifies the budgeting process, allows more spending freedom and reduces stress.
2 - Separate Spending Accounts
In some families each person has their own bank account. Similar to allowances, everyone knows exactly what they can spend, and they can do this without having to discuss or confirm every purchase with their spouse or partner.
3 - Family Accounts
Other families like to have one checking and one savings account so it is transparent what is spent in a month. There is usually a person in charge of the budget. This person has to keep an eye on the categories and the other family members and make sure that nobody overspends.
4 - Financial Planner
If the family is large, it may be wise to consult with a financial planner about what kind of accounts should be held. The more complex the structure, the more difficult is it to come up with a working concept all by yourself.
Common problems - possible solutions
Cash only: If credit card debt is a problem, then don't carry a credit card when shopping - cash only.
Get support: If compulsive shopping is a problem, try shopping with a friend that has good shopping habits.
Ask around: If loan debts are a problem, then ask a financially responsible friend how they pay down their debts.
Don't wait: If problems start arising, don't hide them. The earlier you address them, the easier it is to find a solution.
If there are problems that can't be solved easily then it may be time to see your bank's financial planner. They are usually free for a visit or two, and might have ideas that you haven't even thought of.