5 Key points for Creating a Budget for Large Families

Writing Where Does All the Money Go? on a blackboard

It is an axiomatic assumption that large families tend to have larger budgets. In fact the larger the family the more its expenses. Moreover, before you know the runaway expenses may well spell financial ruin for you and as a direct consequence, your loved ones will be affected as well.  This is why it is imperative to have a properly planned budget in place so as to ensure that you are safe from any unforeseen financial emergencies in both the short as well as the long term.

1.     Cash is in

Its altogether very tempting to use credit to buy things that we can’t afford at a particular point in time. After all the ‘buy now pay later’ aspect of credit cards make life easy, right? Wrong! Basically, using credit cards to buy stuff you cannot afford effectively means you just might end up driving yourself into penury. If you are not in a position to afford something on your current income, buying the same thing and then paying interest to your credit card service provider is certainly not a good idea.

In order to avoid cards, make sure you do not carry them with you in the first place.

2.     Categorize your budgets

Alternately, you may draw your salary at the beginning of the month and then allocate portions of that amount to specific mini budgets such as grocery shopping, children’s entertainment, eating out etc. Once the amount for that mini budget has been spent, try not to use amounts meant for other contingencies to ‘refresh’ that particular budget.

3.     Eat at home

Eating out arguably makes one of the biggest dents on any large family’s budget.  To curtail these expenses involve your children when you go grocery shopping and (within limits) allow them to buy what they like. You may also consider making weekly lunch and dinner menus with individual family members being allowed their own choice of a meal on specific days. This would not only be healthier for the overall fitness of your family, but would give your wallet some relief as well. Moreover, it would cement your family’s ties as well, if all meals were to be taken together.

 

4.     Teach your children to save

Kids as young as seven or eight may be taught the value of saving so that they do not treat you as an unlimited expense account. You may give them a weekly allowance and make them responsible for their own entertainment expenses. You might also encourage them to keep an ‘expense journal’ so that they are able to realise just when and where they have been spending their money.

5.     Set priorities

Make sure that you have your priorities right. Basic household expenses such as energy bills, children’s education and groceries are your first and foremost priority followed by contingency saving. Only after the basic requirements have been met, should you feel free to go and splurge on that giant screen LED 3D TV or other consumer items of a similar nature.

 

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