For most families and relationships, talking about money can be a sensitive subject or even an uncomfortable chat. But communication is crucial, and there are ways to bring up the topic in a positive manner.
Here are five tips on how to talk about family budgeting.
1. Keep Emotion Out of It.
Even if one person is overspending, do not start with anger or judgment – it will only create defensiveness. If you know you are going to have to ask for help with your budget or income from your parents or another person, do not get emotional or demanding, just start out calm and open.
Start the conversation with: “I have been working out how to budget my money and I would like to talk with you about it and the help I need from you to make the budget work.”
2. Be Open, Honest & Transparent.
Be clear and specific on which items you think your family is likely to overdue the spending, and remember to be open to their feedback.
Do you think I forgot anything important? Do you think I underestimated or over-estimated anything?
Transparency is the key to keeping people on track. Each family may want to go about this in a different way – some might want to set a weekly budget, while others may want family members to keep track of expenses on a mobile app.
3. Ask for Support.
Then turn the conversation by asking, “Based on this budget, what do you think you could do to help?” Leave the question open first. Your partner might have ideas you have not thought of yet. Then start to add in your specific requests. Try not to make the process judgmental, but rather say “ Do you think you could change X to Y?”
Remember to make your requests clear and specific.
4. The hardest part is being specific.
The process is give-and-take so you should go into this willing to do both. Once you have made some decisions, write them down with clear specific numbers.
“Please try to keep grocery bill under $X every month.”
“Please keep movie-going under $X each month .”
Being specific can be hard because a family member might feel that you’re calling them out specifically. If you can, try to choose a category that applies to at least two member.
5. Set a discretionary budget.
For some couples, working through the details of the budget together can be really challenging. An alternate approach for how to budget your money is to set a discretionary amount per person that cannot be exceeded.
Each family member can manage his or her discretionary funds individually. Some couples even put this monthly discretionary amount into separate accounts or load it on a pre-paid credit card to keep it simple to track.