How to Organize Your Family's Finances

Keeping track of your family's money can be a difficult task. Between buying soccer cleats for the season and new clothes when your little one has suddenly outgrown their wardrobe, making sure there's still money for groceries and bills is important to keeping everything up and running. You may not know how to organize all the money in and out right away, but there are plenty of strategies and techniques you can apply to turn your paychecks and spending habits into a well-balanced operation.

Understanding Income

The first step is to understand what money is coming in. You can find a pay stub template online that will help you understand where the pre-tax deductions are going and how much you're contributing to things like a 401k or medical plan. Once you know what's coming in each month, you can set up a filing system for household bills and major purchases. You could include folders for things like doctor's bills, utilities, cars, or pets to keep vet receipts and documents. This helps when it comes time to pay the bills at the end of the month or if you need to hold onto an important receipt. Everything is in one convenient place you can easily access.

Setting a Budget

After reviewing all of your bills for the month, you can subtract the total amount from your monthly budget, and you'll find out how much you have left over to spend on things like groceries, gas, or eating out. It's important to review this budget each month for variable costs, such as the utility bill. For example, one month you might have $700 extra because your utility bill was significantly smaller due to cold weather or a vacation. Don't rely on $700 every month because that bill may shoot back up once you're home or the weather changes. A good way to keep track of these things is to set one day aside each month where you review the expected income and weigh it against expected bills. This will help you know if you need to focus a little more on eating at home or if you have some spare change for a date night.

Paying Bills

There are a few different strategies to paying the bills. One is to automate everything, meaning all of your typical bills are on autopay to pull the money from your account on a certain day. If you have a steady pay schedule and make the same each paycheck, this might be a good option for you. It ensures your bills are paid on time and doesn't require any extra time or effort from you. It's an especially good plan for people who have bills that need to be paid throughout the month, or who forget to pay bills regularly. Another technique is to pay bills as soon as you receive them. This is another way to make sure nothing is paid late or forgotten, but does require you to have the money in the account at all times. If you've subtracted expected costs from your monthly income before spending on your family, then that probably won't be an issue.

Saving

Don't forget about your savings account! It can seem impossible to save anything when you're on a tight budget, but even $20 a month adds up eventually. The key is to pay yourself first. Before subtracting for bills or expenses, set some of your paycheck aside for yourself. You can even automate these drafts to ensure you don't use the money on other things. This will help you build up your savings account so you have some money stashed for emergencies.

Organizing finances might seem like a big task, but if you know how to approach it, it's not so bad. Just make sure you have an organization system, you set a budget each month, you have a bill paying system, and you're making sure to save each month.