Budgeting Involves Lifestyle Choices
So at this point, we've taken some percentages as a guide to determine what you're monthly income is and how we are spending every dollar that you're bringing in. So monthly income = monthly expenses. After we applied the percentages, the next part is doing adjustments based on your family's lifestyle. This means that you will be increasing/decreasing dollar amounts in each category. For example, our family yesterday was bringing in $4,667 a month. We had their recreation budget at $250. However, they like their Lifetime Fitness membership which is $176 per month for the 5 of them. Also, they like taking family trips which is around $250 per month. So they're lifestyle is more like $426. Unless they find ways to bring in more income by $176 to make up this difference, sacrifices will have to be made. So they will have to take money from another category to afford their recreation expenses. There's no special magic involved, just hard decision making. This has to be done for all of the other types of adjustments that you need to make to the initial budget to make it apply to your lifestyle. However, remember that the total expenses has to equal the income. So any budget adjustment increases have to have an equal budget adjustment decrease somewhere else.
The Budget Meeting
Also, with this process at this point, I would suggest having one person create the 1st draft of the family budget. In my family, it's usually me who crafts a draft of a new budget if we foresee an increase in income or some large expense that is coming. After I put together my draft of the budget, it has to be brought to Mrs. Budget for approval. So, in order to make your budget a practical living budget to be followed, both parties have to agree on it. That means both husband and wife. This is referred to as the family budget meeting. If you don't do this then this is what I call a "budget buster". You end up with two people with different views of the family's expenses who end up doing their own things.
Here's some helpful tips to successfully negotiate a family budget meeting.
1.) Warn the other person that the conversation is coming. Don't just be sitting on the couch watching Charles in Charge and say, "Oh yeah, here's the budget so you look at it if you want (throws budget at other person)."
#badbudgetmeetingidea
2.) Start the meeting when the kids are asleep and the TV is off. Trust me, you want no distractions.
#doihaveyourattention
3.) Both parties need to be prepared to compromise. If you created the budget, you have to be prepared that some changes will be made.
#compromiseisnotafourletterword
4.) The person who created the budget needs to be completely quiet after giving it to the other person to review. Only speak when answering questions.
#silenceisgolden
5.) The person who didn't create the budget will most likely have some changes so listen to them all and then discuss them all in a positive way. Avoid, "yeah, that's a stupid idea" type of responses.
#trustmeonthis
6.) Do not attack each other and bring up other issues. Ex.."We wouldn't have all this debt, Mary, if you didn't go to Kohls all the time." Leave the past in the past.
#wisemonkeylessons
7.) Unless you know something that I don't, remember that money doesn't grow on trees. Your income is most likely fixed. So what you make is what you make, unless you get another job. So the person can suggest adding money to the budget in certain categories but that means taking money out of another category. Usually, that goes like, "Ok, so we can add more money in recreation like you suggested but we need to figure out where to take that money from." The budget has to stay balanced.
#miyagiknowledgebombs
The first meeting or two isn't going to be easy. Having conversations about money isn't always easy, but it's very necessary. After a couple times, you'll learn how to communicate with each other about money and the talks will get easier and easier. But, you have to start somewhere.
Question of the Day:
Are you in a position to review your budget with your spouse/significant other?
Song/Video of the Day:
Until next time............Happy Budget, Happy Life
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