Family Budgeting For The New Year

Making resolutions as you head into a new year is simple. But a good hard look at the year disappearing over the horizon is just as important. If better financial management is your objective, it becomes the basis for what to do next.

In fact, your family may be well served to think beyond 2015 as you go through finances with a fine-toothed comb. Involve everyone in the group by making specific assignments. Tweak past plans to meet new realities related to aging children, changes in employment and all the other eventualities that go with real life.

Start with a review of assets and liabilities. Savings, investments and loan status all will have changed and need to be considered, as well as income. There must be room for possible challenges to your financial standing. If you find that debt leaves you with a negative net worth, make that the focus for the near future. Plan how you can attack debt through increased payments or finding more sources of income to beat it down. Don’t be one paycheck from poverty.

Involve all household members in finding way to economize, while focusing on the “musts” such as housing, food, transportation, health, utilities, tuition and clothing and prepare to resist temptation to stray off into unnecessary expenditures.

Don’t plan how you can pay tuition before the student is ready for classes. Prioritize spending to meet the costs that can’t be deferred. Keep everyone in the loop so they won’t be surprised when austerity comes to visit. Learning about trade-offs early is good training for life.

If you have problems sticking to a savings plan, make it automatic at the bank. If you don’t have the cash in hand, it is easier to part with. Make the importance of savings a household commitment.

Plan meals in advance and shop in bulk where possible. Monitor waste in the kitchen. Make conservation of electricity, fuel and water regular habits by creating awareness among family members.

Investing has to be an action item. There is no other way to grow money. It takes study and time and resources. Make ongoing financial education part of the plan. Use your networks to learn more and identify mentors who can help you put your money to work. Get an “accountability” partner, a family member, if feasible, to encourage follow-ups and reviews of your action plan.

Make your resolutions based on practical experience and you’ll have more chance of actually keeping them.