How Can a Written Budget Benefit Your Family

Home / How Can a Written Budget Benefit Your Family

How Can a Written Budget Benefit Your Family

Hello Friends! Welcome back to ASW Homestead! Today we will be discussing the many benefits to having a written budget for your home and family.

If you are new to budgeting it can be intimidating! However, once you do it for a few months in a row you will gain the confidence you once lacked. We helped make it a little easier with a simple to use budgeting template. You can find the downloadable monthly budget template at the bottom of the post!

What is a Budget?

But first, what is a budget? A budget is simply a written plan to help you manage your money. It includes the amount of money you have coming into your home each month and a written plan on how to spend or save your money.

It’s your money, you’re the boss! You tell your money where it should go. You want to build a new fence? Include it on the monthly budget. It could be in one lump sum in one month. Or, you could put aside smaller amounts over several months until you reach the amount needed to move forward with the fence.

How can a budget benefit your family?

Benefit 1: Awareness

A written budget brings awareness to where your money is going. No more guessing or assumptions of your financial situation. It’s all in black and white right in front of you.

To create your first written budget you will need to look over every bill and debt as well as your bring home pay. While you are doing that there are some questions that will help you in your process.

Questions to Consider:

What debts do I owe? Including the minimum payments on your written budget plan is a good place to start. However, you could take it a step further and make yourself aware of the total debt owed and your expected payoff date.
What incomes are included? Don’t just include your full time job. Include income from all jobs and side hustles. You want your budget to be as accurate as possible to give you an honest picture of your financial situation.
What expenses can be reduced? Since you are in control of your budget. Where can you cut expenses to increase other areas that are more important to you? For example, our family has cut back on streaming services to have more money allotted to the groceries category.

Benefit 2: Achieving Financial Goals

What do you want to achieve with your money? Everyone’s financial journey is unique, so take some time to think about what matters most to you. A well-thought-out plan will save you time, money, and headaches down the road.

Want to Pay-Off Debt?

Do you want to pay off debt? If so, why? The why behind a desire is important especially when sticking to the budget gets emotionally challenging. When you are walking the aisle of beautiful things and choose to tell yourself ‘no’ because you are working to get out of debt. Why? Maybe you want to become a stay at home mom or you want to travel Internationally. Sticking to your written budget is easier when you know exactly why you’re doing it.

Saving for a House? Or Paying Off Your Mortgage?

Housing is often the biggest line item expensive on a written budget. Do you have dreams of paying off your mortgage? Do you want to pay cash for a house? Those are wonderful financial goals! Include small steps towards your goal on your written budget.

Want to Retire Early?

Saving for retirement is crucial. But, do you want to save enough to retire early? Look into how much you will need saved to retire at your desired age and work from there. Include retirement savings into your monthly budget.

Benefit 3: Reduces Stress and Anxiety

Financial concerns are the leading cause of stress and anxiety for many individuals also known as financial stress. This stress can stem from worrying about financial obligations, overwhelming debt, and financial futures. Financial stress can also lead to physical ailments such as headaches and sleepless nights which in turn will impact relationships and work performance. It can become a vicious cycle! However, a written budget can help you take control of your finances.

Coping with Financial Stress & Anxiety

If you are experiencing financial stress there are several ways to cope while getting your finances in order. First and most importantly, creating a written monthly budget can help elevate financial stress. It will give you back control and show categories that can be adjusted. Next, build an emergency fund for unexpected expenses into your monthly budget. Having an emergency fund with clam many fears and your financial future. Another coping mechanism is to practice mindfulness and meditation to combat financial stress.

Benefit 4: Improved Financial Habits

Another benefit of a written budget is improved financial habits: saving, giving, and living within your means. The first step to solving any bad financial habit is to recognizing the problem. A budget highlights that for you.

Saving: When writing out your budget any lack in savings or emergency funds will become obvious. Luckily, saving for a rainy day becomes easier when it is written in a budget before any expenses are paid. Having money saved in an emergency fund for unexpected expenses will help alleviate using to high interest credit cards to save the day.
Giving: A written budget will also help you recognize any lack in giving. If you so choose, a written budget can provide a consistent category to give to the organizations and charities that are most important to you.
Living Within Your Means: A budget highlights the income you are bringing into your house as well as the outgoing expenses. If your expenses are greater than your income, there is a problem. Thankfully, a budget gives you the power to adjust the categories accordingly to live within your means and prevent going into debt.

Benefit 5: Helps Plan for Emergencies

Let’s talk about emergency funds for a minute. Emergencies are going to happen: a husband will lose his job, the brakes will go out on the car, or a child will break an arm. Emergencies don’t have to be a national level to cause financial stress in the family. Therefore, being prepared for financial setbacks will help you stay resilient and keep moving forward.

Job loss

Job losses are currently happening frequently around the nation. The job you thought was secure laid you off with no notice and no severance pay. What do you do? This is where a written budget can really help you! First, you look over your savings and any emergency funds already in place. Then, you cut everything from your budget expenses that are not deemed absolutely necessary. Your budget already contains that information. Then you can clearly see how long you can manage until you find another job. Emergency funds can be a real life saver in those situations!

Unforeseen Financial Expense

When the brakes go out on the car or a child brakes an arm using the emergency fund to pay for those unforeseen financial expenses can change an emergency into an inconvenience. I would much rather have an inconvenience than a financial emergency.

Start Your Budgeting Journey

Starting a written budgeting journey is filled with learning, growth, and plenty of rewards. By setting clear financial goals, planning carefully, and taking things one step at a time, you can create a written budget that’s allows financial sustainability, and suited to your needs.

You can find a downloadable monthly budget template here: Monthly Budget