- Composing a family budget should be a group effort, otherwise family members may feel as though they didn't have a say in how money is to be spent and distributed. For this reason, parents should not compose the family budget without allowing their children access to the process. This is not to say that children should have the final say when the budget is in the process of getting set up, but instead that they should be able to give input and witness how it is all brought together. The family budget should state how much money comes in, where money needs to go, and what should be done with any excess funds.
- A family budget does not do any good if all the family members don't abide by it. It will be an ineffective budget if Mom follows it but Dad and the kids spend money with reckless abandon. A family budget is not something that you create once and then never reference ever again. It should be something that is an ongoing and evolving process that everyone in the family visits often. If the family needs a new stove, the family budget is adjusted to allow for the purchase. If the daughter in the family needs to pay for sporting equipment, or if the son needs a laptop before heading off to college, these necessities should be run through the budget. This ensures all financial needs are met while still allowing the family to work together as a team.
- While it is true that a realistic family budget can be a great tool for keeping finances in order and helping the family to stay within their financial means, the other huge benefit of a family budget is the lesson learned by the children in the family. Not only do they get to know the family's financial situation intimately, but they also learn about the basics of budgeting and how to deal with unexpected expenses. Parents serve their children well by teaching them these tools that may follow them into adulthood.
