Most people, from young children to grownup spouses, dislike being told what to do. If you're imposing budget rules from on high with no explanation and no opportunity for anyone to weigh in, it's only natural to face some friction.
To get everyone to feel an equal ownership of the budget, sit down with your family and go over each budget category together. Listen to any concerns or disagreements and address them, changing a category where there's a good reason for doing so or explaining why you're not changing a category should that be the best route.
The key here is transparency. When everyone knows the rulebook they're following, and why they're following it, it will be easier for them to stick to it and will eliminate some resistance.
2. Track Your Spending
It's impossible to stay on budget if you don't know how much everyone is spending. Track everything from monthly bills to your children's allowances to make sure you're all staying within the limits you've set. If you notice you're beginning to veer, you can readjust.
How you track your spending is up to you. From the old-school envelope system to high-tech budgeting programs, there are plenty of systems. Choose the one that feels the most intuitive to you, and you'll find it easier to keep on top of things.
Here's one alternate strategy: Pull your savings off the top, then spend the rest. It's the easiest budget imaginable, since it doesn't involve any tracking.
3. Hold Weekly Family Budget Meetings
You can't predict every expense that will pop up, but if you hold weekly budget meetings, it will be easier to anticipate as many as possible.
Avoid being seized by last-minute money requests by setting a standing date on the calendar for a time you know all of your family members will be free (like Sunday evenings). Ten to 15 minutes should be enough, and it can save you all sorts of headaches. Ask anyone if they have any new expenses coming up, like your daughter's school field trip or your spouse's lunch with an old friend.
Work together to decide how you will fit these things into the budget, then check in with everyone individually to let them know how they're doing with their spending and if they need to make any corrections. Be sure to also praise the heck out of anyone who's done especially well.
4. Don't Be a Dictator
Listen to everyone's input, and if someone has a problem with something in the budget, discuss it with them patiently and honestly. You still have infinitely more final say than your children, but by hearing them out and giving them a chance to speak their mind, you let them know you value their opinions and that when you make a decision they don't like, there is good reason behind it.
Will this totally eliminate all grumbling? Of course not. But it will help reduce it.
5.Ask for Help
Just because you're the budget master doesn't mean all the weight of your household finances should be completely on your shoulders. You and your spouse should discuss big financial decisions together, and if you need help, don't hesitate to recruit the rest of your family. One of the secrets of a good leader is that they know when to delegate.
Paula Pant ditched her 9-to-5 job in 2008. She's traveled to 30 countries, owns seven rental units and runs a business from her laptop. Her blog, Afford Anything, is a gathering spot for rebels who want to ditch the cubicle, shatter limits and live life on your own terms -- while also building wealth, security and freedom.
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Managed to get that raise or promotion? Fantastic -- now don't go out there and spend it all immediately. In classic "keeping up with the Joneses" fashion, too many of us see an increase in salary or a sudden windfall (like an inheritance) as an excuse to take our lifestyle up a notch. We buy bigger houses than we need, get the latest gadgets even though ours work just fine,and spring for fancy steak dinners just because we can.
Instead, whenever your financial situation gets a boost, consider the best ways to put that money to work for you. The truly wealthy are those whose money continues to grow and earn them more, even when they're not actively doing anything with it.
The average American household that carries credit card debt holds a balance of around $15,000. If you're among those who have a credit card balance, you've probably seen the little chart on your monthly statement telling you how much you'll pay in interest over the next several years if you make only the minimum payment. (If you haven't, look at it.) The same chart will also compare that to a "suggested" payment that's slightly higher.
Our recommendation? Throw everything you can at paying your balances off as fast as possible. And make sure not to take on any additional debt in the future; if you can't pay for a consumer good out of pocket, don't finance it.
We don't demonize student loan debt the way we do credit card debt because we see an education as an investment -- and higher education often is the difference between one income bracket and another. Similarly, many people justify taking out a car loan by stating that they need a car to get to work.
That said, debt is still debt, and the longer you take to pay it off, the more interest you'll pay. Once you've freed yourself of credit card debt, paying down your car and student loan balances should be next on your list.
Whether it's to handle an unexpected car repair, a sudden illness or a major plumbing problem, you should always have some money set aside to cover unforeseen expenses. Set up a regular monthly transfer from your checking to your savings account to earmark this money before you're tempted to touch it. If necessary, cut back in another budget category (like eating out or entertainment) to free up the funds to save more.
Putting aside a little each month could prevent you from getting socked with a hefty bill you can't afford and then need to finance.
No matter your age, you should be adding to your retirement funds -- such as your 401(k) or individual retirement account -- each month. Just setting aside money sporadically won't cut it; you need to identify how much you'll need to live on once you stop working and monitor whether you're on track to reach that amount.
Here's a quick-and-dirty rule of thumb: multiply your annual spending by 25. This is the amount you'll need in your retirement portfolio, if you assume that you'll withdraw 4 percent per year to live on during your retirement. In other words, you'd need $1 million in your portfolio to live on $40,000 annually. Creating a plan will help you make sure you're able to retire the way you envision.
A home is a big investment, and sometimes that investment doesn't wind up netting you the return you thought it would.
The biggest culprit is having too large a balance on your mortgage, which detracts from your own personal stake in the current market value for your home. The sooner you pay this amount down, the better your home equity will be.
You also want to be careful when purchasing a new home. Buying in a neighborhood that's on the downward spiral or buying the most expensive home on the block, likely won't net you a good return when it's time to sell. Also take care to stay away from custom renovations (like turning the garage into a recreation room), which could negatively affect your resale value.
Paying high investment fees eats away at your gains. And since your gains compound over time, this creates a domino effect that can really chip away at your wealth. Take a close look at your investment companies' fees and shop around to make sure they're not taking more of your money than they need to be.
If you don't have a long-term investment vision and are simply playing the market, you could seriously undermine your wealth-building potential. Stop paying attention to market fluctuations, media pundits and the stories of your friends and family. Instead, create your own long-term investment strategy that will maximize your overall returns. Resist the urge it play it ultra-conservative (or fall for get-rich-quick schemes) and educate yourself on the best way to make your dollars work for you.
If you're having trouble making sense of your options or want a second opinion, seek the help of a trusted financial adviser.
Based on your experience and seniority level, education and industry, you should have a fairly good idea how much you ought to be making at your job. If you don't, check out a site like PayScale to get a ballpark figure.
If you're not making what you're worth, you're doing more than leaving money on the table; you're also losing all the compound growth and investment returns that money could be generating for you. Invest in yourself with professional development and continuing education, make the case for that raise or promotion, or seek out a company who will value you higher.
If you don't have proper insurance coverage, you're taking a very big risk that could come back to bite you. Too many people think the worst can't happen to them, but the hard truth is you can't predict the future, and scrimping on sufficient insurance is never a good idea.
Of all the things we're hesitate to part with our money for, adequate insurance coverage should not be one of them. No matter your age, everyone should be properly covered with:
Homeowner's or renter's insurance.
Flood insurance (if you live in a flood-prone area).
Umbrella liability insurance (especially if you own a small business).
If a spouse or children relies on you for support, make sure you have a decent term life insurance policy, as well.