How to Keep Those Family Finances Under Control
Are your holiday traditions changing this year? If so, you’re in good company. While we hold on to the things that matter—family, friends, and the joy of the holiday season—our traditions will take new forms, evolving as we find new ways to celebrate and spend time together.
As traditions (and families) change and grow, Quicken adapts to your needs, helping you manage the unique challenges of family budgeting through every season. Here are some of the things our Quicken families are doing this holiday, and all year round, to maintain strong financial habits.
Using tags to track family spending in as many ways as you need
You probably already use categories like Groceries or Entertainment to keep track of your family’s spending. In Quicken, tags let you track that spending in multiple ways, even across categories, without having to change the category structure you’ve already created.
Let’s say you want to keep a close eye on all your holiday expenses this year. Whether you’re buying presents for the kids or renting a special movie to watch with the family, you’d like to know how it’s all adding up. You can create a Holiday tag to keep track of that total.
By adding that tag to all your holiday transactions, you can keep those family movies in your Entertainment category where they belong and still mark them as Holiday spending. Use your Holiday tag whether you’re buying presents, shipping packages from the post office, or hiring some help with your festive outdoor lighting, so you can track all that spending together.
Tags are also great for keeping an eye on your spending across various family members. Do you want to make sure you’re spending roughly the same amount on all your kids (or grandkids)? Set up a tag for each one. You can use more than one tag on the same transaction, so when you buy that holiday present for Ashley, you can tag it both Ashley and Holiday.
Using tags to track transactions in multiple ways is a lot more flexible than creating a long list of highly specific categories—and a lot more effective. Instead of having to create categories and subcategories that you’ll only use once a year, you can use tags that are helpful all year long.
For example, use Ashley’s tag whether you’re buying her a birthday present or taking her out for ice cream. Then, during the holiday season, add that Holiday tag too. Use spending-by-tag reports to follow your spending on Ashley as well as all your holiday spending overall. The possibilities are endless.
Budgeting day-to-day spending while saving for future goals
One of the toughest things about taking control of family spending, especially during times of change, is having to balance your day-to-day needs against your long-term financial goals. Start by using Quicken’s budget feature to see where you are today.
Quicken automatically creates your budget based on your recent spending, giving you an immediate feel for where your family money has been going. Then, you can adjust each category however you need to. The exercise of creating your custom budget can help you see places where you might be able to save, carving out more room for your future goals.
Tags work with your budget by giving you another way to keep track of family spending. Use them to create a kind of mini-budget whenever you need to.
Just like you used a holiday tag to watch your holiday spending, you can create a similar mini-budget using any tag you like. Use tags to monitor your spending on birthdays, pets, a kitchen remodeling project … you name it. Tags, together with Quicken reports, let you keep track of any aspect of your spending you want to while keeping your overall budget intact.
If you have specific long-term goals you’re saving for, make sure you account for those savings contributions by including them in your budget. You can even track your savings transfers as you make them. By including them in your budget, Quicken factors those savings contributions into your monthly spending, helping you make sure you don’t spend that money on your family’s day-to-day expenses.
That’s especially important when you’re trying to balance several different savings goals. In thinking about saving for planned expenses, like college, it’s easy to forget about unplanned expenses that might come up. By building emergency fund contributions into your budget as well as those college fund savings, you can be prepared for both.
Having conversations with family
The more you take advantage of all the features Quicken has to offer, the more you’ll benefit from the very best thing about Quicken: that feeling of confidence that comes from knowing your true financial position. Whether you’re doing better than you expected or you find areas you’d like to improve, Quicken helps you take control with all the tangible information you need, right at your fingertips.
Once you have that information, talking with family about finances becomes a lot easier because it eliminates guesswork from the conversation. Report trends, for example, can start a dialog: “Did you know we spent 40% more on shopping this year than we did last year? It’s our third largest expense.” Those same report trends can also ease family concerns: “We were worried the holidays might be tight, but it turns out we’ve spent a lot less this year than last year overall.”
Once you understand your complete financial picture, it’s a lot easier to align on your long-term goals as a family. Everyone can work together to decide what they really care about and what they don’t, making it a lot easier to save money and do more of the things you love. By including the whole family in those conversations, you’ll show your kids what it means to make smart financial decisions. It can even help eliminate feelings of worry or guilt over the money you do spend because the whole family will know it’s included in your financial plan.
Finally, you can use those conversations to weave in valuable lessons about fiscal responsibility. For older kids, you can start explaining how credit cards charge interest on any expenses you can’t pay off right away, so the things you buy on credit end up costing more. If you save for that vacation as a family ahead of time instead, you’ll have more money to spend on all the things you want to do together.
When the whole family is on board, everyone can enjoy that feeling of taking financial control as you participate together in family decisions. You might even come up with some new ways to express your most cherished family traditions, making each consecutive year perhaps a little different as your family grows, but just as celebratory and joyful as ever.
For more family oriented financial-planning tips and articles from Quicken, visit the family section of the Quicken blog.
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About the Author
Erin Michelle Sky
Erin Michelle Sky is a freelance journalist at Quicken covering the holistic human experience in business, career, technology, and personal money management.
She holds an MBA from Georgia Tech and a JD from Emory University, where she was a Woodruff Fellow. Before Quicken, Erin taught math and computer science for Johns Hopkins University, then spent several years working for Fortune 100/500 companies through McKinsey, BellSouth, and Dentons.