How to Create a Family Budget
Many people dread the word "budget" and the work it can entail. However, if you want to stay ahead of your finances, direct your spending and saving and know where your money goes, a budget is essential. Planning your family budget doesn't have to be a huge undertaking. It does take time and effort, but with the right tools, you can do it.
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Instructions
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Locate your last month or two of bank statements, pay stubs and bills. Using this paperwork, you can see how much money you have coming in and how much is going out.
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Make a list of all fixed household expenses, those you must pay, on a spreadsheet or using computer software. These expenses include rent or a mortgage, your car loan and even bills that come due only once or twice a year, such as car registration and homeowner's insurance. Note the monthly amount you owe next to each item on the list. If the amount you pay varies each month, use an average from the past three months. If the item is paid once a year, divide it by 12 to get a monthly figure.
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List flexible expenses, such as groceries, eating out, fuel and medical bills. If you don't know exactly how much you spend on these things, locate receipts to determine the figure per month. If you don't have receipts or are not sure, list a best-guess estimate and evaluate your needs for the next month or two, adjusting your budget as necessary.
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Note your monthly pay at the top of the page, based on your pay stubs, along with any other income sources, such as interest, alimony or rental income.
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Determine which bills you will pay on what date based on your paychecks and the bill due date, and deduct your expenses from your income each month. The goal is to have money left over after you pay the bills. If you exceed your income limit, you need to make some adjustments in your spending.
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Start by cutting out nonessential expenses, selling items you don't need and calling creditors to negotiate for better rates, lower payments or set monthly payments.
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Evaluate your budget every month and adjust where necessary. Look at your budget often to keep you on track an in control. Display it for the family, which may make it easier to say no to nonessentials, and remind everyone that you are choosing to spend your money wisely.
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Tips & Warnings
Use a computer program to make the budget easy to read and change.
Don't give up. Very rarely does a budget work with the first try.
Avoid saying that you can't do or have something because the budget doesn't allow it. This puts a bad connotation on the term budget. Instead, say something that implies you are being wise with your money.
References
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