Money-saving tips for families to reach their financial goals together

For many families, running the household is like running a business. The family's CFO, also known as Mom or Dad, manages the day-to-day financial activities and tracks monthly spending and expenses. But all family members can play a role in helping save more and spend less.

Let's look at some family budgeting tips designed to help everybody work together to save money and find financial success.

Create a family budget.

It's important to create a family budget. Of course, it can be easier to make a budget than to live by it. But the only way to get ahead is to spend less than you earn, and a budget or spending plan helps you do that. The hard part is the discipline it takes to stick to the family plan.

Families should discuss their spending plan together. Even if you don't include your children until later, work on it as a couple. Otherwise, you might find that two people in the family are spending the same dollar and there isn't enough cash left at the end of the month.

Calculate your monthly income.

Creating your family budget starts with knowing your monthly income from all sources. This is how much you have to work with to reach the family's financial goals.

Identify and categorize expenses.

If you aren't sure how to get started, try a 20/50/30 budget:

• 20% for savings and debt repayments
• 50% for needs
• 30% for wants

Once you've set up a spending plan, compare it to your actual spending. They might not match up, but that's OK. The initial goal is to see where you spend your hard-earned dollars and then adjust the 20/50/30 budget based on your needs and desires.

Family budgeting tips

When it comes to budgeting, part of your 20% savings and debt repayment category will go toward your financial goals.

Set realistic financial goals.

How do you set realistic financial goals? First, don't limit the conversation. Just make a list of what you want to save for in the short and long term. Make sure it has how much you think each item will cost.

After you make your list, reality comes into play. Set realistic financial goals and time frames based on your finances. If you have $200 left over each month, you're not going to magically save $6,000 over one summer. But you might save $800.

Prioritizing your goals is also important. For example, it might take three years to save for your dream Hawaiian vacation. But in that same time, you could achieve three other goals. Only you can decide which goals to prioritize based on your budget and time frame.

Also, long- and short-term goals can have different savings strategies. Being clear about your priorities can help you take the necessary actions for success.

Build your emergency fund.

If you had a sudden, unexpected expense, like a major car repair or week in the hospital, would it derail your savings and your budget? We all need an emergency fund. It's the core of our financial foundation. If you don't have one, make saving for one a priority. We define a full emergency fund as three to six months of living expenses.

But don't be discouraged if that feels like a large number. Set an initial goal that feels comfortable for you then continue to save little by little. You'll get there over time. And you'll get the financial peace of mind that comes with an emergency fund. The best place to put your emergency fund? For most people, it's a savings account.

Practical ways for families to save money

Saving money needs to be a family affair. When one person is saving and one person is spending, it can create conflict in the marriage or between kids and parents. Here are some ways to save money as a family.

Set a limit.

Set a limit, like $100 or $200, on how much the family can spend without discussing it first. If it goes over this amount, talk it over first. By holding off on the purchase and talking it over, you may be able to avoid an impulse buy you might later regret.

This also gives you time to think about how this purchase might affect your other family savings goals. That new pair of noise-canceling headphones might not seem as nice after realizing it could cost your family its planned visit to the local amusement park.

Teach kids to save.

One of the best things parents can do is teach their children positive financial habits. And when children understand what the family is working toward, they can better grasp why you say no to something.

They might start asking themselves, “Am I saving my family money?” If they can see how it impacts the family's goal, it may even lead to them not asking for an expensive item.

Shop smart at grocery stores.

Budget-friendly meal planning can be a sensitive topic. Sometimes you or your kids don't want to give up your favorite treats. But making small changes, like eating one meatless dinner a week to combat rising meat prices, can have a big impact on your grocery bill.

There are other ways to save money on food as a family. Plan out your meals, and make a grocery list and stick to it. Focus your meal planning around items that have coupons or are on sale. Don't be afraid to change up a meal if you can take advantage of a great deal.

And don't grocery shop on an empty stomach. When we're hungry, we tend to make impulse purchases or splurge on things that look good on the shelf but aren't on our grocery list.

It can also pay off to compare prices between grocery stores. Make a note of what you normally buy in a week, then see which stores in your area have those items the cheapest. You could save by shopping around or visiting multiple stores for different items.

Use energy-efficient home practices.

Families also can save money on their utility bills. Adjusting the thermostat just a few degrees can send your electric bill soaring, so before you crank up the heat or drop the AC, consider wrapping up in a blanket in winter or turning on a fan in
summer.

Thrifty entertainment ideas

We'd all like to take a yearly vacation to a tropical beach or exciting foreign city, but it's just not feasible for most of us. We all have limited income and must make tradeoffs to meet our financial goals. That's why thrifty entertainment ideas are key.

And "thrifty" doesn't have to mean "boring." For example, you might not be able to take the whole family to Europe for the summer, but you could get a season pass for the family to your local amusement park or water park for a fraction of the cost. And some attractions offer activities for passholders all year long, giving you a lot more bang for your buck.

Other relatively cheap ideas include visiting local museums, going camping or even being a tourist in your own town for a day. These can help you avoid extra costs like airfare and hotels and are easy ways to save money without sacrificing fun.

Keep your budget in mind when you're planning your vacation. Look for discounted airfare and travel tickets through organizations like your military installation's MWR Ticket and Travel office. You may also be eligible for other perks.

These money-saving tips can help put you and your family on the road to financial success. But planning is only the first step; you need to actually follow the plan to make it all pay off.