
Once you have developed an initial spending plan that provides for essential family needs and balances expenses with income, review the proposed plan with your family. Spending decisions will affect the whole family, so it is important to talk with your family and explain that everyone needs to be involved with the process of developing a spending plan.
Family members can decide what their needs and wants are and rank these needs according to importance. Becoming aware of your family’s needs can help you work out the details of a spending plan. If family members understand that tough choices must be made, and if they have a voice in deciding, they will be more willing to accept decisions that require a sacrifice on their part.
Keep a record of what is spent in each expense category to discover if the amount matches what was budgeted for that category. If more was spent in one category than planned, a reduction of spending in another category will be required.
Be sure to involve other family members in tracking expenses. One suggestion is to give each family member a small spiral notebook for daily expenses or use a shoe box or drawer to keep receipts. Label receipts so you know the expense category for each one.
After tracking expenses for several months you may find your family is operating “in the red.” If so, a couple of things must happen: expenses must be reduced, income must increase, or both. Arrange for a family conference. Lay out the records of income and monthly expenses. Were there differences between your family’s priorities and its actual spending patterns and income? Discuss where cuts can be made with the least sacrifice in family welfare. Examine spending by category. Discuss ideas for either increasing or decreasing the amounts.
If the spending plan did not adequately provide for your family’s needs, it may need to be revised. If the plan suited your family’s needs but members had trouble sticking to it, stricter self-discipline and better management may be required in future months. Enlist better cooperation within your family on spending.
A spending plan is something to keep working and reworking until it suits your family and satisfies individual members. Do not expect to have a perfect spending plan the first time. With each revision, improvement can be expected. Although you may be satisfied with the present plan, it may need to be changed from time to time because of changes in family circumstances, such as a serious illness or accident. As conditions change, reorganize your plan around new goals, needs and wants.

Monthly Spending Plan Worksheet |