More often than not, family budget has always been as a source of conflict. And mostly it is the major earning person who gets to make any financial decision, irrespective of an approval from the rest. Money playing the most intrinsic role in life, the families need to be consistent in this aspect. Here follows a 4-step cycle which would help you in family budgeting.
1. Set up your priorities.
Priorities differ from goals. Goals are targets that support your priorities whereas priorities are those aspects which you want to give preference to in your family?s life.
Don't set too many priorities as it will defeat the purpose. May be 2 to 3 priorities will do.
After it has been agreed upon, put down those priorities on paper. Then, post the paper so that everybody can have a look at what the family is going to be focusing on for the near future.
2. Set your goals.
After an agreement on the priorities by the family, the next step should be to set your goals. Goals are generally specific and computable conditions, when achieved, support the priorities automatically.
While setting goals, the target must be established in such a way that it is both challenging and achievable. Saving up to 15% of the family?s monthly income is a reasonable target for your child?s future education.
Try setting just one to two goals per priority, in order to maintain focus.
3. Working hard towards your goals.
Once your priorities and goals are set, get started. Your family?s attention will be focusing only on achieving these goals. Use an income cum expense-tracking tool to keep track of the progress, especially on financial goals. This can be implemented by buying a notebook and writing down all the expenses which will help in setting a budget for the future expense. Few others invest in a family accountant or a computer software. However, the ultimate aim is to maintain a monitoring system which will indirectly help in achieving the goals formulated.
4. Evaluate your family life.
Some point of time, when you think you should evaluate your life, find out how the family is working out on the goals. Check off the goals that has been achieved and hence new goals can be formulated.
Sometimes, you may have to re-evaluate the priorities during major changes like for example a career shift or if some member in the family goes away. In such cases, the whole cycle starts just like the one similar to the life cycle!
Abhishek is a financial expert and he has got some great Family Budget Secrets up his sleeves! Download his FREE 96 Page Ebook, "Family Budget-Demystified!" from his website http://www.Trading-Masters.com/23/index.htm. Only limited Free Copies available.
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