According to a story at CNN.com, just over 40 percent of American families have a household budget. While that is an improvement over a 2013 Gallup Poll that stated only 32 percent of families used one, many still have no clue where their money goes, how to save, or even what to save for. With discouraging statistics like that, it’s no wonder financial planning for families, including the simple task of making and sticking to a household budget, seems so overwhelming.

The good news, though, is that it is easy to start a budget. The trick is to stay with it. What’s more, there are all kinds of online tools, from calculators to budget forms, that can help you. Once you get the family budget in place, you’ll see where your money is going.  That’s just one step in getting a family financial plan together. Before you begin anything, you need to determine your family’s net worth. From there, you can figure out your budget, and then figure out your plan.

The Family Net Worth

Your family’s net worth is the value of your assets. Your assets include the value of your home, cars, savings and checking accounts, cash on hand, 401(k)s or other company-sponsored plans, non-company-sponsored retirement plans, and cash value of your whole life insurance policy, jewelry, collectibles, and more. When you have this number, subtract your liabilities, or what you still owe on your mortgage, car loans, student loans, credit cards and other consumer debt, and any other debts you owe. Of all your assets, however, you must focus most on your home’s true value, which can be based on a private assessment, a multiple listing service, or your own calculation based on the equity you’ve put into it.

After you subtract your liabilities from your assets, you’ll have your net worth. If you need specific details, you can use a detailed net worth calculator. Once you see that figure, you’ll either be pleasantly surprised or wonder why you’re not on the steps of the poor house.

But fear not: now that you have an idea of what the family net worth is, you’ll want to work to increase your assets and decrease your liabilities. And for that, you’ll need a family budget to see where the money is going.

The Family Budget

While this is integral to any family financial plan, for some people, it is as challenging as herding cats. Why? According to Maryalene LaPonsie of US News & World Report, some people are just generally disorganized when it comes to their finances. Plus, some people don’t like to be confronted with their own bad habits. Yet with all the many apps and other online resources available, starting a budget should be easy. Simply list the amount of money coming in each month, list all bills that must be paid, and then list all other expenses. The trick is that you must account for every cent in your budget. This is where things might be uncomfortable and where you will need to decide what sacrifices you’ll need to make as a family. But once you see where the money is going and where you can save, you can then start your plan.

The Family Financial Plan

Once you see where the money is going, decide as a family on what the short-term and long-term financial goals should be. Get out of debt? Pay off the cars or the house sooner? Pay off all credit cards? Save for the children’s college fund? Increase your retirement savings? Or, is your goal some combination of any of these? Once the plan is in place, stick to it, just like your budget. One of the positive outcomes of this whole process will be that your children will see the value of money and will learn how to handle their own finances, too.

These three phases – determining your net worth, setting down and sticking to a budget, then working the family financial plan – can help you manage your family finances and put you with the percentage of people who have a family financial plan in place.

After losing her husband Greg, Sara Bailey created TheWidow.net to support her fellow widows and widowers. She is also the author of the upcoming book Hope and Help After Loss: A Guide For Newly Widowed Parents.

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