Your Family as a Business

One of my dear Facebook friends lists herself as the Chaos Manager for her family. The family is listed as a company: Last Name, Inc. I love it. If you think about it, running a household and family is like running a business. The family has regular expenses – rent, mortgage, utilities, and groceries – and income.

How have you got your family business planned? Do you have a monthly and yearly budget? Do you know exactly where all your family’s money is going? Do you know how much you have coming in from all sources? In order to run a successful family business, the answer to all those questions should be yes. You don’t even need the latest and greatest accounting software; a simple notebook for tracking will do just fine. Knowing everything you’re doing now will help you plan for your family’s future. It will also help you find any destructive financial patterns and work on stopping them.

The best way to know what you’re spending is to write down everything. No expenditure is too small. Write down what you spend as you spend it. Stopped at Starbucks for a chai eggnog latte? Write it in your notebook. Did you spend 50-cents so your toddler could ride the ride outside the grocery store? Write that down too. Now you can create a budget and allot funds to all areas you spend.

The next step is to make sure that all other accountings are correct. Reconcile your bank statement each month. Save receipts so you have proof of your transactions until after you’ve balanced your account against your statement in case there’s an error in your account. Be sure you’re doing the same with credit card statements.

This may all seem like a lot of work, but your financial peace of mind is worth it.