Family Money Management And Stress Management With A Realistic Budget

A major and consistent source of stress for most people is money. Well, actually the stress is caused by spending more money than they bring in or have. The answer to this is simple: spend less. Yeah, and the answer to losing weight is spend more calories than you eat. So let’s come up with a plan for realistic family money management and hopefully get rid of some of that stress with a realistic budget.

1. Do NOT make the traditional “money in, money out” budget. This may help you understand the problem, and show you where you are spending money that you shouldn’t. But the problem is that defining the budget this way is what governments do, and you know how hard it is for THEM to cut anything out.
2. Put your income at the top of a sheet. This is all regular income. Don’t put bonuses. Do include your spouse’s income and child support - if it is reliable.
3. List the required deductions. Tax withholdings, social security, medicare. Do not include voluntary contributions to retirement plans.
4. Subtract from income. This is your income. This is your cap. This is the number that cannot be exceeded.
5. List fixed expenses. Rent or mortgage, loan payments, credit card minimum payments, utilities (average), and any other kind of payment you have committed to in writing (i.e., can be sued over). Include any court-ordered child support or alimony you or your spouse is ordered to pay
6. Subtract again. If you are below zero, call a financial planner or a bankruptcy attorney.
7. The figure you have now is your disposable income.
8. Put 10% into an emergency fund.
9. Put the budget to the side. Have a hard talk with your family about the priorities of your discretionary spending. Are dance lessons for the kids higher priority than getting a new car? Do you need to eat out for lunch every day? Which is more important: that boob job or saving for a second honeymoon? There are no answers to these questions. Except for the answers your family comes up with. And then those are the only answers.
10. Put these priorities next to the discretionary income amount, and plan it out. Know that the items at the bottom of the list probably can’t be paid for right now. That’s why they are at the bottom of the list.
So there’s your budget. Follow it each month. Look at your spending and see if you spending discretionary money on the bottom-of-the-list items. Spend money on the top-of-the-list list items first.
See, doing it the other way – listing your spending first and trying to cut individual items out- makes the spender defensive. “Of course I need to eat lunch out everyday. It’s a meeting, it’s stress relief, it’s my one little source of pleasure. And why should I cut that when you get to keep your expensive gym membership?” And here comes the fight…
This budget is highly likely to succeed because everyone has contributed and everyone has accepted the priority decisions first. Once the priorities are listed, the money is spent on them from top to bottom. When you run out of money, you run out of spending.
Family money management is one of the biggest sources of stress. Meditating, deep breathing, and exercise may calm your physical reactions to stress. But they won’t relieve the source of the stress.
Learn how to attack stress and turn stressful situations into opportunities (like this article has turned the stress of financial pressures into the opportunity to realign your family’s values), to truly reduce stress in your life.,