• Families have many financial commitments, including paying for their housing, childcare, insurance, food, transportation and luxury items, in addition to saving for the future. Managing money effectively as a young family is a critical step toward having enough money later for paying for college and funding retirement.
  
  

Make a Spending Plan

• Also known as a budget, a spending plan is a detailed plan for how to spend the money you make. It is difficult to manage money if you do not know where it is going, so divide a paper in half down the middle and write your income on one side and your anticipated expenses on the other. Start with the highest-priority expenses at the top of the list, such as your housing, groceries and insurance, and put lower-priority items, such as entertainment, gym memberships and vacations, near the bottom of the list. Add up the two sides and cut your spending amounts until they are less than your income.
  
  

Include the Kids

• Cutting back on spending and managing money wisely is a process that kids should be involved in as well as parents. Not only does knowing that money is tight help kids be more content without the newest toys or fashions, but seeing their parents manage money well also teaches kids important skills they can put to use when they are running their own households in the future.
  
  

Be Debt Free

• Saving money is counterproductive when you have high-interest debt, such as credit card debt. If you are paying a higher interest rate on your debt than you are earning from your savings, you should focus first on aggressively paying off the debt. When credit cards and other high-interest debts are all paid off, put the money you were spending on credit cards into savings and other areas of your budget.
  
  

Use Budget Jars

• An easy way to track and stick to budgets in household spending categories is to use cash only and keep it in labeled jars or envelopes for each category of your budget. Put your allocated amount in each jar or envelope at the beginning of the month and use that money only for anything you buy in that category. The method helps you see how much you have left and keep from overspending. Kids can even have their own jars for their allowance.
  
  

Set Savings Goals

• Families with long-term savings goals should identify these goals and include them in the household budget. For example, if a family is trying to save $2,000 for a week at an amusement park next year, they should divide this goal into equal monthly amounts of $167 per month. The family can then save that much every month and be able to take their trip without putting it on a credit card. The same idea can work with other goals as well, including vehicles, college savings, retirement accounts and holiday gifts.