Set up goals 

Setting up goals include evaluating your personal financial whishes and needs, as well as your family’s, and then working to  make them come true. 

• Identify and record specific financial goals of each member of your family, like saving to buy a house or a car, take a vacation, put your kids through college, pay debt, or plan your retirement.
• Define which goals you need to achieve and which ones you just wish to achieve. This will help you prioritize your money flow, and realize what you can allow yourself and what should wait.
• Determine if your goal is a short term one (less then a year), medium term (next 5 years), or long term (from 10 to 15 years). Think about where you and your family want to be in 5, 10, and 20 years from now.

Plan

The biggest challenge faced by most people is to buy a home. But there are other goals to plan to. After you, your spouse and your kids decide what it is that you wish to achieve for your family, you need to draw a plan so you are able to see things clearly.

• Write down all important purchases you wish to do, as well as all other financial goals you have in mind.
• Determine specific steps to achieve your goals.
• Establish which steps need to be taken before, during and after achieving your goals.
• Start saving now. The sooner you start saving, the sooner you will achieve your goals.

Budget 

Budgeting is a vital element on family finances administration.

• Identify where all family’s earnings come from, including jobs and other sources of earnings, like investment returns. You also should determine when you receive them (day of the month), as well as how you receive them (direct deposit, check, cash, etc).
• Make a journal to reconcile your monthly expenses with your monthly incomes. Watch your journal and your budget closely during two months to determine your real experience accurately.
• Establish different categories in your journal, and include the amounts you save towards your short and long term goals. If necessary readjust your budget categories, and redistribute your income to comply with your needs.
• Remind yourself to budget for unexpected expenses, like car repairs, replace an appliance, or pay for a trip.

Daily expenses

Knowing how your family spends money is a key factor to a successful financial administration. Once you know where your money goes, you’ll be able to plan a budget ideal for your family. 

• Ask the adult members of your family to use a notebook or an electronic file to record all money spent during a whole month.
• Keep all records of money spent – cash, check or credit card – so you can see where your money is going.
• Establish a category in your budget for every kind of expense your family has, from important expenses like rent, to everyday purchases; as well as the amount you assign your kids for their expenses. Make sure you include your savings and financial charges of any pending loan.
• At the end of the month, add up all expenses of a category to determine your grand total for the month.
• What you’ll see at the end of the month can be quite revealing.
• It is a good idea to review your budget every year, or every time something big changes, like income, the purchase of a home, or a new baby.

Save, save, save!

A penny saved, is a penny gained. Sounds simple, right? But in reality it is more complicated than it seams at first sight.

• Take a percentage of your income (5 to 10 %), and transfer it to your savings account or in any investment you might have. 
• If one of your priorities is an expensive item, like a new stereo or appliance, save extra money to purchase it, over the monthly amount you are already saving. But try to avoid spending money on expensive items that are not a priority during these moments.
• Talk to your bank to have a specific amount from every salary check transferred directly to your savings account, so you save that money before you have the opportunity to spend it.  This concept guarantees that your essential savings come before your discretionary spending.

Making payments on time 

There are many ways to pay your bills every month: going to your bank, with a check, in cash, online, or with a credit card. Select a method that is easy to maintain and to manage.

• Open bills as soon as they arrive, know the amount and due date for every bill.
• Paying bills on time every month will help you keep a good credit score.
• If you have automatic payments coming out of your credit card monthly, make sure you keep those amounts in mind when paying your credit card.
• If you are not able to pay your bills on time, talk to your creditors, explain your situation, and make an agreement for a payment plan. 

Smart credit use

Many times it is impossible for every family to purchase everything they need – even less what they wish for – without borrowing money every once in a while. You may borrow through a personal loan, a credit line or a credit card; credit must be something used to improve the management of your personal finances, not to become an extension of your income. 

• Purchase only what you can afford. A good general rule is to guarantee that your debt costs from credit lines, personal loans, and credit cards (including mortgages), don’t exceed 15% of your net income. Say no to any purchase over this amount.
• Pay the most you can on every pending debt you have, every month, and always pay more than the minimum required.  Make sure you are paying out first what has higher interests.
• Select the right credit card for your needs. Compare characteristics you need (like an annual fee, of a low interest rate) with the characteristics you want (like points for miles, food, gas or cash rebates), and see which one better adapts to your needs.
• Don’t borrow from a creditor to pay another one.