Creating a budget is not an easy task and that is one reason why many people shy away from it. Budgeting requires a lot of effort and discipline to achieve your financial goals.

Budgeting becomes a lot more difficult when you are a parent, since you will have to put the whole family into consideration with there different demands.

Wherever kids see new products, whether on TV or in the store, chances are they’ll ask for things. In today’s commercialized society, it’s more difficult than ever to foster financial discipline in your children.

The internet and some financial experts have provided many tips to help you properly budget as a parent, and we will bring some of these tips to your attention in this article.

• How can you Budget as a Parent?
• How much Money Should a Family Make?
• How much money Should you have saved before Starting a Family?

How can you Budget as a Parent?

Running a household, especially one with children, comes with unexpected financial surprises. For this reason, becoming a brilliant budgeter will not only keep you on track financially, but it will give you peace of mind that you are not over-spending, as well as satisfaction that you are saving too.

Read Also: Your Personal Budget Bliss

Sounds impossible? Well, it’s not really. Learning to budget is a life-long skill that you will always be grateful for. Here are our steps for successful budgeting as a single parent.

Let your Children be Imvolved

Many parents worry that starting a budget will upset their children and family peace. If your kids aren’t used to hearing “no,” it will certainly be an adjustment for them to suddenly learn that money is tight.

But instead of letting the budget be a burden on your family relationship, use this as an opportunity to teach them about financial discipline — something the whole family can learn and work at together.

One strategy to keep things positive is to avoid the word “no.” Instead, when your young child asks for things, tell them to keep a list of what they want and prioritize the list. Later, you both can revisit the list and talk about it.

Teenagers can learn money management by being given a precise budget for their essential purchases, like clothing. Also, let them in on your process.

Show them the budget itself, and teach them the tactics you use to find good deals, like Internet research. Some teenagers might be willing to get jobs and contribute some of their pay to the family funds.

Make Adjustment when Necessary

In the chaos that is family life, it seems the only thing that’s constant is change. The biggest and most dramatic changes usually have to do with losing and switching jobs.

This will directly influence your income, which has a big impact on your budget. Ideally, having already been on a budget, you will have saved up for an emergency fund to use in the event of losing a job. But you’ll want to make your budget stretch even more during that time, just in case.

Whenever your long-term goals change, revisit your budget to re-evaluate your situation. Perhaps you’ll find that a new baby is on the way, or a family member is diagnosed with a medical condition that will require expensive treatments.

Or, as time goes on, your priorities could simply change. You may decide that you’d rather delay that European vacation, and instead put your savings toward a down payment on a bigger house.

Each major change in your situation or priorities will require looking at your budget in a new light and making adjustments.

Check your Progress

Another key to budgeting is to regularly check how you’re doing. A family that has a lot going on can easily lose track of certain expenses or not realize that certain bills are adding up more than they used to.

After your first month of trying to stick to a budget, sit down again and see how the family did.

Don’t be too hard on yourself if you fail to live up to your budget goals at first. You might need to re-evaluate your budget if you made it unrealistically strict, or you might not have realized how much you were spending in a particular category.

Self discipline doesn’t come quickly, after all. Every budget will require tinkering, and you can’t expect things to be easy or perfect the first time you try. The important thing is to not get discouraged.

On the other hand, if you did very well, that might be a sign that you can further tighten your budget to save even more.

Once you do get used to your budget, don’t assume you’ll always stick to it. Check again every month or so to make sure. And remember to account for new and seasonal expenses, like higher energy bills in the hot summer months, or the costs of Christmas gifts in December.

Use Hand-me-downs and Buy Used

The costs of providing clothing for a family of children who are constantly growing can rack up. Every new season will require a new wardrobe.

Big families are used to the age-old cost-saving rituals of hand-me-downs, which is passing clothes down from one child to the next as they grow. It’s nothing to be ashamed of and a great way to encourage family unity and cooperation. Also, consider sharing clothes with neighbors and friends.

Along the same lines, it’s a good idea to consider buying used items. Thrift stores and consignment shops are great places for bargains if you have the time and patience to search them. And this goes beyond clothes. For every big purchase, think about whether buying used is feasible.

Make use of Coupons

Companies like to offer coupons to entice customers to try products and brands they otherwise wouldn’t. However, as a savvy shopper, you can take advantage of this service by looking for coupons on things you already need and buy regularly.

Another trick is to combine deals if possible. For instance, save coupons for things you think you might need soon, and then keep your eye out for sales on that product.

Or you could get discounted gift cards and make your purchases during a seasonal clearance. The savings can be particularly significant.

The keys to coupon saving are flexibility and organization. You need to be flexible about the products you’ll get, and not loyal to a particular variety or brand.

However, it wouldn’t be wise to buy anything you know your family won’t use. It’ll also help to have a system for organizing the coupons you find.

Cut them out of newspapers or print them off the Internet, and keep them in a special container or pocket book. Some coupon experts recommend categorizing them or sorting them them by expiration date

Look for the Best Prices

Some grocery store chains tend to carry better deals than others. If you can set aside some time to list the food products you typically buy, and compare the costs among local grocery stores, you’ll get a general idea about which will give you the best deal.

But don’t stress over individual items. It’s probably too difficult and time consuming to split your grocery trip up into multiple stops for particular items.

As we’ve already discussed, as long as you know what to look for and avoid in a supermarket, you don’t have to shop at pricey organic markets to eat healthy foods.

A smart shopper is a frugal shopper, and this doesn’t just apply to food. When the family is on a budget, you should research any significant purchase ahead of time.

Make a Grocery List

Food is one of the biggest necessary expenses for families. What’s worse is that watching your wallet might tempt you to opt for cheaper, unhealthy foods. But if you have the discipline to prepare meals at home, you can maximize your spending power and eat well.

Initial costs might be a bit bigger — such as buying in bulk sizes and collecting a modest spice supply — but will be more cost effective in the long run if you plan ahead of time.

Making grocery lists (and sticking to them) is essential to a food budget. Don’t let you or your kids be distracted by impulse purchases, especially junk food.

One idea is to plan your grocery budget with the intent to spend more on the foods with the most nutritional value, like fruits, vegetables and grains.

Then, spend moderately on protein and moderately healthy foods, like meat, eggs and dairy. Before you go out to the store, take inventory of what you have at home and plan your meals around using what you have already.

Time could also be a factor. If you’re already working overtime to help pay bills, buying a quick, cheap burger at a fast-food restaurant seems easier than taking the time to prepare and cook a meal at home.

Instead, try preparing larger meals when you have the time so there are more leftovers. Also, keep a supply of fruits, vegetables and healthy snacks, like yogurt and granola, that can sate your hunger throughout the day and won’t require lots of preparation.

Create a Spending Plan

Once you have a good, detailed picture of your monthly spending habits, as well as a prioritized list of needs and wants, you can begin the painful but necessary step of planning your budget.

If you find you’re losing money and digging the family into debt, your first priority will be to limit spending and start saving. The first saving goal should be an emergency fund.

But long term financial security also involves setting bigger goals with the money you’re able to save. Is college on the horizon for your kids? Are you worried about having enough for retirement down the line?

Setting concrete goals will not only help you plan for the future, but probably also give you more motivation to stick to a budget. If you can fit short-term goals in, like vacation plans, it will feel great to have these rewards in the not-too-distant future, too.

So, if you’re losing money, or not saving enough for your goals, it’s time to take a cold, hard look at everything you can cut out of your expenses. Use your prioritized list of needs and wants to help you make difficult decisions.

Consider what you can do to improve your income as well. Can you work overtime? Ask for a raise? Take a second job? If one parent isn’t working, taking a full- or part-time job is a possibility.

Separate Needs from Wants

The next step in writing a budget for a family is to draw some hard lines between what the family needs and what it merely wants. This isn’t as easy as it might seem, and each family will have to decide this on its own.

Take food, which is in itself a necessity. But what kind of diet is the family willing to settle for — especially when it might mean sacrificing what’s considered the healthiest options?

The first step is, of course, to eliminate unhealthy food items. But after that, it might be difficult to juggle the health benefits versus the price.

Even clothes can be a judgment call. Working adults might require a polished wardrobe for their career needs. And most parents don’t want to make their children uncomfortable by sending them to school wearing old or tattered clothes.

Track Your Family Income and Expenses

Of course, there’s no avoiding this time-consuming step of writing a budget. Though you may consider yourself financially savvy, chances are you can’t keep all the necessary details in your head. It’ll help to actually sit down and track your money.

You’ll need to record your income and expenses over the past few months. To get an accurate assessment, gather your bank statements, paycheck stubs and bills. If you use online banking, this might only require logging in to see exactly how much money comes and goes.

Ideally, start collecting your detailed receipts ahead of time. The more detailed you’re able to get, the better you’ll be able to assess where your money goes.

Income for salaried workers is steady and easy to record and predict. But others who work hourly or whose income fluctuates will have to take more general estimates and plan for changes in their budget from month to month.

Likewise, expenses can be fixed and always the same amount (like a monthly Internet bill), or unfixed and fluctuate based on the season or month (like energy and gas bills, or groceries).

Finally, categorize and sum up both your income and expenses on a monthly basis. This will allow you to visualize your monthly financial activity easily.

How much Money Should a Family Make?

According to a recent Gallup survey, most American families believe a family of four would need at least $58,000 per year to “get by” in their communities. That’s more than the median household income, which came in at $55,775 a year in 2015. And it’s more than double the 2015 federal poverty threshold of $24,036 for a family with two adults and two children.

Clearly, there’s a pretty big disparity between what government officials consider a “living wage” and what American families consider a living wage.

According to MIT, the living wage varies depending on which region of the United States you live in. “Families of four (with two working adults, two children) in the North ($69,273), and West ($68,651) have higher median living wages before taxes than the South ($63,837), and Midwest ($63,144),” according to MIT’s living wage report.

Yet, even the living wage as dictated by MIT is just that: a wage you can surviveon. So how do you know when you’re finally earning a comfortable living? And how do those numbers change as you go through life?

Let’s take a closer look at how much money the middle class really need to get by these days.

How do you calculate that magic number?

An obvious difficulty with tackling financial questions regarding income is the “magic number” is going to be different for everyone. It depends so much upon lifestyle and priorities, which will vary from one person to the next.

One way you can get an accurate idea of your own ideal income level is by utilizing an online tool, such as this one by LearnVest, which helps you determine about how much money you would need to live your ideal lifestyle.

We looked at various expenses, based on nationwide averages, to determine what a “comfortable” income level amounts to. That includes home prices, child care, and retirement costs.

We used MIT’s Living Wage calculator for a base income. To make things simpler, we used Maryland’s living wage figures, which happen to fall within the most expensive region of the U.S.: the Northeast.

First, we’ll take a look at the recent college graduate or young professional, and then move on to other demographics.

The recent college graduate

Recent college graduates face their own, unique set of challenges. Young professionals are busy adjusting to the job market. And often they have just started in their chosen field. Plus, they might have a mountain of student loan debt.

Although young professionals are likely making less than their senior counterparts, they also have fewer expenses. They’re less likely to be sharing income with a spouse. And many are living on their own or sharing an apartment with roommates.

For most young professionals, buying a house isn’t high on the to-do list. In other words, young professionals are likely to have fewer expenses than a young family.

Thus, recent college graduates in their 20s are in a great place to start saving. And though it might sound mundane — and be difficult to balance student loan debt with longer-term financial goals — experts say it’s worth the effort. Investopedia notes saving early can mean the difference between thousands and millions in the bank. And “when you start early, you can afford to put away less money a month since compound interest is on your side.”

So what you would need to live “comfortably” as a recent college graduate in most parts of the U.S.? According to MIT’s Living Wage calculator, a single adult in Maryland needs to make about $13.84 an hour to “get by.” Then, factor in a 20% to 30% buffer to allow for savings, spontaneity, and extra debt.

The young couple

Young couples can potentially save on rent and groceries compared with recent college graduates because they’re able to split their bills. In general, each party should be able to make a little less and still maintain relatively the same lifestyle as before they partnered up.

That being said, many young couples are starting to look toward broader, long-term financial goals, such as saving for a house, retirement, or a family. As a result, while theoretically you might be able to make less and still live comfortably with your partner, making smart long-term financial decisions means added income is necessary.

According to MIT’s Living Wage calculator, two adults in Maryland need to bring in $10.55 an hour to make a living wage. But if you’re hoping to buy a house or start financing other long-term goals, you’ll need to bring in even more income. 

CNN Money cautions that your total debt payments (such as mortgages, car payments, student loans, etc.) shouldn’t exceed 36% of your gross income, so it’s important to run the numbers to be sure of what you can truly afford.

Financial Samurai notes with an income of $50,000 a year, after you contribute the maximum to your 401(k) you’re left with just $28,000 in gross income, which amounts to about $24,000 after taxes — not nearly as much as it might sound like after expenses, including rent, transportation costs, and groceries.

The small family (1 to 2 kids)

Things suddenly become more difficult (and more expensive) if you decide to have kids. Young families certainly have more expenses, and it shows in the numbers.

MIT suggests families with one to two children would need to make between $15.69 and $29.30 per hour, depending on whether one or both of the adults are working.

And that number should increase based on our 30% buffer for unexpected or big-ticket expenses. Plus, child care can run you hundreds or thousands a year, depending on where you live. Private school? Let’s not even go there.

In the end, in order to be comfortable as a small family and still have adequate money for savings — retirement and college being the big-ticket items — it’s likely you’ll need a lot more than the living wage.

The couple approaching retirement

Like recent college graduates, people nearing retirement have a very unique set of challenges ahead of them. While young professionals are often learning to acclimate to the work force, those nearing retirement must do the opposite: plan for their transition away from the working world.

Unfortunately for those looking to retire, most of the work of saving for retirement has already (hopefully) been done. As an older couple, many of your largest expenses have already been accounted for. You’ve bought a house, paid it off, sent the kids to college, and saved as much as you can for retirement. How much could you possibly need?

Assuming a couple has already paid off their mortgage and owns their house, income requirements will be slightly less than they were as a young couple or family. Yet, as recent reports note, most Americans aren’t ready for retirement.

It’s important to maintain a similar income and save as much as you can. Remember, most Americans aim to earn about 75% to 85% of their pre-retirement income during retirement.

CNN Money offers a retirement calculator to help you discern how much you need to save before you actually wave goodbye to the 9-to-5 grind. Chances are you’ll need to maintain the same income you had as the head of a young family to adequately save.

How much money Should you have saved before Starting a Family?

Deciding whether you can afford a bundle of joy or two is a personal decision, but having a good idea of the general costs can prove helpful.

From diapers to child care to teenage braces, middle-income parents can expect to pay $233,610 in expenses for one child over a period of 17 years, and a sizable portion of the spending starts in the first year, according to a report published by the U.S. Department of Agriculture in 2017.

Before Pregnancy

Before you attempt to delight your parents with that grandchild they’ve been waiting for, evaluate your health insurance coverage. Check whether your policy covers prenatal and maternity care as well prescriptions and diagnostic testing.

Make sure you will have coverage if something goes wrong and you need hospitalization or surgery before delivery. Check your co-payment requirements as well and set enough money aside to cover them, including co-payments for services you hope you won’t need.

Ideally, your insurance should cover most or all of your care during pregnancy and at least 30 days after you deliver. If it will not, consider looking for better coverage before you get pregnant.

Leave Time

After you bring a new baby into your family, you will probably want to spend as much time as you can with the little one before you go back to work. If you do not have paid leave through your job, save enough money to replace your income for the amount of time you plan to stay home with your new family favorite.

For example, if you plan to stay home for three months, save three months’ worth of income. If your company offers partial pay, save the difference between the amount you will receive and your normal income.

Emergency Funds

Whether you have children or not, loss of income or an unexpected major expense can prove devastating. With children running about, however, comes more responsibility and an even more pressing need to have a sizable emergency account.

According to Wells Fargo, most people need an emergency fund equivalent to three to six months of expenses. You may feel more comfortable saving even more when you’re planning for a family. Self-employed parents may also require more to account for the possible loss of a client or a downturn in business.

Baby Supplies

You might receive many of the supplies you need from friends and family members, especially if you have a baby shower. However, you will likely want to purchase some things yourself. The amount of money you need to save for baby supplies and equipment will depend on the items you choose, as baby item costs vary widely.

To get an idea of how much you need, make a list of everything you plan to buy, such as a crib and bedding set, several outfits and a supply of diapers — you’ll need lots of them — and then find out how much the items cost online or at a store near you.

Read Also: How Personal Finance is Evolving Through Mobile Apps

Finally, save the amount of money you need to cover those items plus about 20 percent extra for items you decide to buy on impulse. There will likely be plenty of those — the baby cuteness factor is too much for most parents to resist, even if they’re on their second or third.

Statistics

The costs of having and raising a baby will vary, depending on your unique situation and style of parenting. However, you can use statistical information to help you estimate how much money you might need. According to the U.S. Department of Agriculture, a baby costs middle-income couples close to $13,000 per year from birth until age two.

Expect to spend even more as your child grows, especially if you plan to provide your talented little one with extras like swimming and dance lessons or if you want to save for their college education.

Finally

In the end, you could end up turning the need for a budget into a blessing. Kids and parents alike will ultimately learn a deeper appreciation for the things they have. And the communal struggle could make your family closer than ever.