How to Create a Family Budget with the Finance Mom Blog

We're so tickled to hear from the lovely Melanie from Finance Mom Blog today! She's addressing some fabulous questions today about finances, budgets, and more! Make sure to comment with any feedback or follow her and her family's journey over on Instagram at @penniesfromheaven. Thanks for sharing your insight and knowledge with our readers, Melanie!

As with most things in life, starting is the hardest part, and budgeting is surely no exception. My husband and I had to plan a night where we sat down at the table to talk about everything. We brought out bills and bank statements from the past 6 months, and decided where exactly we can save money (most of it came down to not visiting Amazon so frequently). My best advice is start  the next time you’re at the store. Budgeting begins with self-control, and being able to say no to tempting situations (like those adorable baby girl clothes that you know will only fit your daughter for another month or two).

What would your number one tip be for focusing on your list of needs vs. wants. How to truly discipline yourself?

Think about needs on a purely survival level: food, water, shelter. Think about how much you spend (and are willing to spend) for groceries every month. Rent or mortgage payments? Utilities, water, etc.? These are basic necessities. Every time I am at Target about to make a hasty purchasing decision, I think… how often will I use this? If it’s something that we’re both going to forget about by tomorrow, then I walk right past and try not to look back.

How much do you recommend each family should be putting into savings per month?

The 50/30/20 rule is a great rule of thumb for basic savings knowledge. Half of your net income should be used towards necessities like paying bills, while 30% should be used for discretionary expenses, and at least 20% should be put into savings. Personally, we stick to a 50/25/20/5 rule, taking away 5% from discretionary expenses and putting it directly into savings for Penny and using it to make investment decisions.

What are some good tips for creating realistic money goals?

• Be honest with yourself and your partner about meeting needs

• Think about the long-term during your short visits

• Give yourself a weekly or daily budget (using cash helps me stick to a tight budget)

• Don’t completely deprive yourself

What are some ways to teach your children about money, spending and budgeting?

Good ways to teach your little ones about money, spending and budgeting is implementing your realistic goals as soon as possible. If your young ones are toddlers like mine, they may develop an interest in shopping, and bargain-hunting becomes a fun game. If you already have some kind of allowance or reward system in place for your children, talk to them about their goals and what they want to save for. Sometimes if it’s a large purchase, offer to pay for half and watch their motivation skyrocket. One of my previous posts "Saving for a Rainy Day" notes that self-control is the biggest contributor to your savings. Doing some analysis while you’re at the store with your kids can teach them skills about smart shopping: comparing product weights vs. price vs. ingredients. Bringing coupons along is also an easy way to save a few dollars.

How much should you be putting away in savings per month for your child's future needs? Extra-curricular sports, college, etc.

My husband and I try to put away about 5% of our combined income into a 529 college savings account for Penny where we can choose each specific investment. My latest blog post (Top 3 Stocks to Watch for Moms Who Shop) goes over some stocks I’m watching and waiting to buy for a bargain. The great part about starting to save as early as possible is that the money will grow over time. In more than a decade the money should grow substantially, and much more than if the money sat in a regular savings account over that time.

Thank you so much for reading,

Melanie Lineberger

Finance Mom Blog