3 Simple Tips to Better Forecast and Plan Your Household Budget

June 24, 2019

 Photo: Courtesy of Wix Photo Gallery

 

Scott and Tiffany are newly married, and like most couples, it is ubiquitous for one of the spouses to handle the family’s finances.  With Scott being stern with the number crunching and Tiffany wanting to enjoy the fruits of their labor, their financial priorities are nearly an impossibility to sync together.  

(Read more about Scott and Tiffany at Focus on the Family

 

Each spouse may encounter differences in their methods of saving money and budgeting.  Setting aside these differences, there must be some flexibility in reaching both spouses’ priorities.  On our website, we promote Zero-Based Budgeting outlining that every dollar earned must be assigned to a category within the budget.  While one dollar may go towards a utility bill, there is nothing wrong with having another dollar going towards entertainment.  After all, what is the point of working so hard day in and day out if you can’t enjoy life?

In this article, we will highlight and explore a few other options just in case a Zero Based Budget doesn’t work for your household.  We will discuss:
•    Forecasting Your Financial Goals
•    Using Tech for Tracking Budget
•    Automate Your Month-to-Month Budget

 

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According to US Bank, “only 41 percent of Americans follow the most basic of financial planning tools – a budget” while “nearly three in five Americans (57%) feel their financial situation prevents them from fully enjoying their time away from home or the office.”

 

Forecasting Your Financial Goals
If you’re the type of person who absolutely hates budgeting your finances or you have tried managing your money on paper or a spreadsheet but fail with being consistent, try forecasting your financial goals.  
Sometimes having too complicated spreadsheets and budget templates can leave you getting lost in the weeds and overthinking how you spend, save, or give your money away.  


Instead, try forecasting how much you plan to save, how much you plan to pay down debt, and how much can you responsibility give away to charity or church.  


For example, setting milestones or goals creates a real challenge and benchmark to achieve.  By July 30th, you plan to pay down $500 in debt, put $1,200 in your savings account, and donate 10% of your income to your local church.  


When July 30th approaches, compare how well you performed in accomplishing these milestones to the targets you set.  Where can you improve?  What went wrong in the plan?  Are your milestones realistic, or do they need to be adjusted?


Like budgeting, you will still need to hold yourself accountable. 

Using Tech for Tracking Budget
Recently I came across an article in the NY Times where Tara Siegel Bernard, a personal finance reporter, highlights how she doesn’t like traditional budgets.  She struggles like many of us with managing every dollar, which leads to a migraine or feeling guilty for overspending.  It happens!  


Instead, she recommends a few services highly admired in her life, making budgets easier like Mint and Personal Capital.  Such tech apps alert you when overspending occurs, and you can track your cash flow and if you are progressing with your retirement goals.  


An app recommended is You Need a Budget , available on iTunes.  With a rating of 4.8 out of 5.0 for 12.3K ratings, fans appear to love this app.  This isn’t a free app with an annual subscription of $83.99 or monthly cost of $11.99, fans commented it has broken their paycheck-to-paycheck cycle, put them on a path towards debt freedom, and has motivated them to save more money.

 

Automate Your Month-to-Month Budget
This six-letter word, budget, makes some of you cringe.  I get it, but here is some help to save you time.  In the initial process of setting up your budget, EveryDollar will move the prior month’s budget to the following month.  Having used this app for several months now, I can tell you; personally, it has saved me a few hours per week when managing my money.  


EveryDollar can be used on the app or its website.  They do a fantastic job of keeping the process easy and straightforward to make sure you’re being held accountable.  You can track your financial goal progression, customize categories, have one-off expenses, and track your debt balances to determine if the final balances are coming down.

 

When it comes to budgeting, your family cannot avoid the responsibility of budgeting your finances.  While some aren’t number crunchers, there are a few other methods to help prevent the heartache of cranking out numbers on a spreadsheet and avoid disappointing results that you are broke.  Instead, try to forecast your financial goals and determine if you are reaching these financial benchmarks.  Try using tech to your advantage by using an app or automation to help streamline your budget.  In the end, a debt-free household is a happy household.   

 


 

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