Making a Bimonthly Family Budget

Getting Started

The first step toward making a bi-monthly family budget is gathering information. The better records you've been keeping, the more accurate your budgeting will be. Ideally, use the expenses of the previous 12 months to get a realistic picture of where the money goes. Dividing the year's expenses by 12 will provide a rough estimate of how much is spent per month, to which can be compared the family's monthly income. The most important realization to make is whether the family is spending more than it takes in, and therefore needs to cut back on spending, or if the family is living within its means, but would like to shift its spending to better meet its priorities.

Budgeting Bi-monthly

A study published in 2008 found that families who make annual budgets are better able to predict their actual spending than those who make monthly budgets. While there are several reasons for this, including the fact that some expenses are periodic or seasonal, an effective budget has to be broad enough to be accurate but narrow enough to be useful. Making a bi-monthly family budget fits both conditions because it helps guide day-to-day spending, but is better able to capture the more irregular expenses--things like auto maintenance or holiday shopping, which don't fit into a neat monthly budget.

Categorize Expenses

When listing out the expenses for each 2-month period, categorize them into three major groups: fixed, variable and periodic. Start with the fixed expenses--things like rent or mortgage, utilities, phone, cable, childcare and other regular bills. These are like a business' fixed overhead costs, they're unlikely to change and you're unlikely to go without them. The fact that they're predictable is in your favor because you know exactly how much of your budget will go to them on a regular basis.
Then list the variable expenses--things that might still be necessities, but that fluctuate from month to month, like groceries and dining out, gasoline, credit card bills. Using your previous year's expenses, you can come up with an average monthly cost for these and factor that into your bi-monthly budget.
The third category are those irregular and discretionary expenses like holidays, magazine subscriptions and even insurance payments, which aren't discretionary, but might only be due quarterly or annually.

Learn from Your Budget

The purpose of drafting a budget is not just to crimp your spending or create anxiety, it's to better understand where the money goes. Once all the expenses are laid out, it might be surprising to see how your hard-earned money is spent. But, at this point, it should also be clear where expenses can and must be reduced in order to meet the family's goals. As time progresses, save records and receipts of every expense and compare them to your budget frequently to stay within the plan. Make adjustments where necessary. Eventually, every family should have regular deposits into a savings account included in the fixed expenses category of their bi-monthly budget.

Resources

• Building a Better Budget
• Creating a Family Budget
• Simple Household Budget Tracking