If you’re single and living on your own, you need a personal budget. But if you’re in a committed relationship and raising a family, you need to upgrade to a household budget. You need to account for everyone’s income, savings and monthly expenses. You’re all in this together.
A household budget does a lot more than account for everyone living under one roof. Read ahead to find three more reasons for taking on this financial strategy:
Having separate budgets for a single household is an organizational disaster. By combining everyone’s personal finances under one financial guide, you can guarantee that everything is neat and organized. Bills can get paid on-time. Essentials can get covered. Savings can be optimized and put away for important goals.
Making an Emergency Fund
One of the important goals that a household budget can help you save for is an emergency fund. It’s a safety net that can help you recover from sudden problems that don’t work with your monthly budget. Maybe your car stalled when you were on your way home. Maybe your bathroom toilet overflowed, and you need to call up a plumber to fix it. You don’t have to panic about affording the costs because you have the emergency fund right there.
Once you have a household budget, you can start building up an emergency fund. In the meantime, you should think about applying for a line of credit by CBW Bank offered through CreditFresh so that, if approved, you can still have a safety net when something goes wrong. You can use the line of credit to cover unexpected costs at inconvenient times. That way, you can recover from the emergency right away.
When you use it properly, a line of credit can also help you improve your credit history and your credit score over time. Use this feature to your advantage.
Teaching Your Kids about Money
Kids don’t grow up and know how to be financially responsible all on their own. They need to be taught how to sensibly spend and save from a young age. While their teachers at school might cover the topic of financial literacy on occasion, it’s primarily your duty as a parent to teach them about money.
Teaching kids about money doesn’t have to mean sitting them down and talking to them about interest rates and bank fees. The best way to teach your kids about money is to get them involved with your household budget. It will help them understand important lessons in earning, spending, and saving. These are the same lessons that they will internalize and take into their adulthood.
How can they get involved with the budget?
- Make a chart of the family’s monthly expenses together. They can see which costs are essential and which ones aren’t.
- Bring them shopping with you. Show them how you compare prices to save money.
- Give them an allowance and help them make their own purchases.
Your budget needs to be more than a good fit for you. It needs to be a good fit for the whole family. Don’t worry — the simple change will benefit everyone involved.