How to Budget on One Income When You Have a Family

Living on one income can be challenging and difficult at times, especially with the soaring prices of fuel and groceries. Using a budget can create peace of mind and helps one to feel in control of his or her money. Instead of the money just disappearing and not knowing what it was spent on, the individual actually “tells” the money where to go. Here are some steps to making a budget work.

Difficulty: Moderate

Instructions

Things You'll Need:

• Excel
• Checking Account
• Savings Account
• Cash
• Envelopes
• Debit Card (not credit card)

How to Budget On One Income When You Have a Family

1. Create a spreadsheet in Excel. List your expenses in the first column (it is helpful to create a hyperlink for expenses that have multiple items, like groceries or toiletries--these will have more than one item because you usually buy groceries more than once a month). Start with fixed expenses first--things that stay the same each month (i.e. Rent, Newspaper, Cell Phone, Telephone, Auto Insurance, Health Insurance). Then list your variable expenses--things that can change each month (i.e. Utilities, Groceries, Toiletries, Dates). In the second column, have a planned amount budgeted and in the third column, have an actual amount. The planned expenses amount and income should be the same. Do not spend more than you make! Note: Sometimes money for automobile repairs or health bills will come out of savings, which is part of the reason for having savings amounts.

2. Pay yourself first. Strive to pay yourself 10% each month. That is money that goes into savings. Why work to pay someone else your whole paycheck? Be sure to pay yourself! Having money in savings also helps when unexpected expenses, such as automobile repairs or health bills come up.

3. Use cash instead of credit cards. Use the “Envelope System,” which involves having envelopes with items such as “Groceries,” “Toiletries,” “Dates,” or “Mad Money,” and then put the amount budgeted for that item in cash into the envelope. You will find you spend less when using cash and impulse items are purchased less often than they might be when using credit cards. Once the cash is gone, it’s gone, and there is no racking up of debt.

4. Include “Mad Money” in your budget. Mad money can be spent on anything you want to spend it on and you don’t have to be held accountable for it (i.e. buying books, DVDs, getting nails done, etc). Budgeting is a little more fun when you have a little bit of free spending money.

5. Create a shopping list and plan your meals when preparing to go to the grocery store. Plan your meals for a week and then write down the ingredients you need. When at the grocery store, don’t go up and down each aisle and don’t go hungry, thereby cutting down on purchasing impulse items. Don’t be afraid to use store brands, especially if it is much cheaper than the name brands. Use coupons whenever possible and try to buy items on sale.

6. Cut down on eating out. Eating out can be easy to do, especially if you are tired and don’t feel like cooking for a family at the end of the day. Try and limit eating out to once or twice a month. You can also try cooking in a crock pot if you are too tired to cook at the end of the day or make meals ahead of time and freeze them, so only reheating is necessary for a delicious dinner.

7. Be happy that you have accomplished the desire to live on a budget and stick with it. The more you work on your budget, the easier it gets. You have the added bonus of avoiding debt and saving more!.

Tips & Warnings

• Work on your budget with your spouse. Be sure to include him or her in financial decisions.
• Don’t use credit cards to try and stretch your budget. Live within your means. Living on less than you make is better than incurring unnecessary debt.