I believe in teaching your nippers about the value of money and the importance of budgeting early on. I believe in it so much, as a matter of fact, that I have been helping my sprogs learn the tricks of the budgeting trade from the time they were 10-years-old until today. As my twins maneuver into the macrocosm of higher academia (and the mounting expenses accompanying this brand-new adventure), my family style budget has never before been more valuable or efficacious.
Our Family Budget
To understand our family budget, you have to understand how we manage our money. We all have a joint account, our family account. Then, each of us has our own individual accounts.
We use the family account to pay monthly bills, buy groceries and as a savings vehicle. Individual accounts are for individual expenses. All money goes into the family pot for my husband and me, and then that money is split up between our individual accounts, once the bills are paid and money put in savings.
While the twins' accounts are linked to ours, their paychecks are deposited directly into their individual accounts, and are not part of the family budget.
About two years ago, I signed us up for Mint.com's free budgeting website, and I've never looked back. Every member of my family has a username and password that grants them access to the household budget and (likewise) access to their own "micro-" budgets.
We classify and plan for each person's income and expenses together at the beginning of each month. We do this for the conjoined budget and for each of our children's individual budgets. We help them set goals they can stick to and discuss what money is being spent, versus what money is being saved. And since Mint.com synchs up with each separate bank account we have, we never have to do any manual updating.
Accountability to the Family Budget
I am a humongous devotee of answerability. And by "huge devotee", I mean enormous. The reason I opted to have our family budget commingled with separate budgets for our kids is that it gives me the ability to track family spending, set independent and household nest egg goals and provides me with a hard-hitting, kinesthetic learn-as-you-go tool.
Thanks to Mint.com's portability (you can use it online or use their app), my family stays connected and coordinated with our idiosyncratic and household funds at all times. In the event someone overspends using either family funds, or personal resources, we get an email informing us of the faux paus. By catching money mistakes as they happen, we can work collectively to correct our course before spending gets out of hand and before our budget is completely blown.
Why I Believe it Works
My system of rules works for us because it affords each individual in my family (from my 11-year-old to my 17-year-old twins) personalized control of her own cash flow, but also a more accomplished and across-the-board understanding of the budgeting process, and the aftermaths connected with not adhering to a budget. In fact, I would even go so far as to say that my 17-year-old's have a better understanding of budgeting and consequences than most 30-year-old's I know.
The entire family uses money, so the way I see it, the entire family should know what's going on with the money, and be able to understand the importance of sticking to a family budget.
How does your family do it?