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Managing Money: A Suggestion on Who to Put in Charge

 

The best method of managing money in a home is often to let one person be mainly responsible for creating the budget and tracking expenses. You'll make fewer mistakes if one person enters the expenses and income. Then, you can share budget reports with your spouse in order to hold each other accountable, and to assess whether you're on track. 

Creating a Budget

One person should be responsible for creating the budget. That's often you, the work-at-home mom, because you're primarily responsible for managing the household and your children in addition to running a business. You have a firm grasp on the needs of your household, and know roughly if not precisely, how much money you spend in various areas.  However, it depends on your specific situation, and you should do what works best for your schedule and family dynamics.

Use a software program to create your budget. You can use your business software if it allows you to create multiple businesses. The problem is, it may be too complex for the job, and it's often more of a hassle than it's worth. A basic Quicken program works well, because you can track expenses as well as create your budget. If you just used a spreadsheet to create a budget, you wouldn't have a record keeping function.

Modifying the Budget

You and your spouse should meet often to discuss your personal and business finances, but the same person who creates the budget should be responsible for modifying it. If you're both in charge, it can lead to confusion. Even if you modify the budget on the laptop during a meeting with your spouse, that's better than you both modifying the budget at different times without the other knowing.

Record Keeping

The same person who creates the budget should also handle recordkeeping. All income and expenses should be recorded and categorized. Managing money is a lot easier when you're able to quickly see what you're spending or earning compared to what you budgeted.  The best person to record keep is you, and you can fit it in when you do your business books. You can set aside time weekly or monthly to collect all cash receipts from your spouse to record the expenses not drawn from the checking account. For example, if your spouse pays toll fees or spends cash on miscellaneous items, then ask him to hold on to receipts or record expenses in a memo book. You can collect the data from him when you're ready to make your entries.

Reports

Assuming you'll be in charge of creating and modifying the budget, and tracking expenses, you should also be the one to generate reports. Knowing the financial health of your household is essential to managing money. The main report you want to generate is the budget comparison report, which shows whether you and your spouse have followed your budget in each category. If you don't use a budgeting or other money management software, then you'll have to do this task manually. Another report to generate is an income statement and balance sheet. If you've sold or acquired assets, you'll want to generate reports to see where you stand, so that you can make wise decisions moving forward.

Managing money with two people involved doesn't have to be a nightmare. As long as you have a family vision statement, and establish family goals, you'll be more effective and solve the challenges you're sure to face.

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Daphne Mallory, Esq. is the co-owner of Mallory Writing Services and has written more than 100 articles helping home based business owners and entrepreneurs start and market their business. You can learn more about her here.

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