School doesn’t teach us how to have a conversation about money. That is unfortunate, because our financial lives can get complex and stressful. Mortgages and car payments, utility bills, grocery expenses — it all adds up quickly. And then, you are expected to save for college, put away money for retirement, and maintain an emergency savings fund.
But it’s not all responsibility — families want to have a life, too! Being able to spend on entertainment, vacations, and some good old-fashioned family fun is important. Which brings us to the subject of budgeting.
A budget seems like a straightforward idea. Tally up incomes, list expenses, and make decisions about what to do with whatever money is left over — how hard could that be?
Unfortunately, that is where most family budgets fall apart. Each family member is likely to have an opinion. You may want to buy a new boat to enjoy before the kids go off to college. Your spouse would prefer to put that money into retirement savings. Meanwhile, your daughter needs major dental work, and your son’s car keeps breaking down.
Fortunately, there are ways to manage these conversations. Here are a few suggestions to help you navigate those budget decisions with grace.
For many families, talking about money matters can be difficult. Maybe one of you grew up in a family where there was no modeling of constructive financial conversations. Perhaps your upbringing was to count every penny and never throw away food — while your spouse grew up in a home where money flowed without count. And, if there is uncertainty in the relationship, one of the spouses may feel uncomfortable bringing up the subject of money.
One way to get over the differences and the initial discomfort is to start small and talk often.
Set up a family meeting to talk about the potential future purchase. Introduce the subject and open it up to a discussion about the pros and cons. Give everyone a chance to voice their opinion, but don’t allow the family to go off topic. You can even write down thoughts from the brainstorming session on a big poster board.
After the conversation has ended, keep the communication lines open. You may need to plan for a follow-up discussion as things evolve or as your financial situation changes.
Just as it’s important to hear everyone’s opinion, it is also important that all relevant family members feel heard.
Let’s say you as a family are thinking about buying a fishing boat. However, it has been a tough year financially with several large medical bills and some home repair expenses. But if the family pulls together, you could save up enough to make it happen.
Talk about what you can do personally to earn a little extra income in the coming months, and where you can potentially cut back on non-essential expenses. Ask other family members to do the same. A burden shared is a burden lightened.
You can even set individual and family goals around the amount of savings you think will be necessary. By getting everyone involved, you can generate excitement around reaching the savings goal together. A bit of friendly family competition could go a long way, as well.
The purchase of an expensive item can sometimes be emotionally charged. When you really want to buy something, it’s easy to feel like you’ve worked hard and you deserve it.
However, just because you want something badly does not automatically make it a sound financial choice.
When you are talking with the family about a big purchase, balance the tradeoffs and keep an open mind. If you go forward with the purchase, what will your budget and lifestyle look like weeks, months, even years after the purchase? Are you sacrificing long-term financial security for short-term satisfaction? Is the purchase going to put you deeper in debt when your family is working hard to get out of a hole?
Sticking to a budget can be a challenge for one person. Figuring out how to manage a budget for the entire family can sometimes be overwhelming. When you are making major financial decisions for you and your crew, consider working with a financial professional. They can help you see the big picture, evaluate all the hidden consequences, and make that purchase in a responsible way that will increase you and your family’s enjoyment.