How to Plan a Budget for Your Family

A budget analyzes spending.

Budgeting is an important financial task. It can help a family manage its money and plan for future expenses. If the family is working toward a goal, such as debt repayment, budgeting is essential. Through the initial budgeting process a family will be able to see where its money has been going and can reroute it to other categories, such as debt reduction or savings.

Things You'll Need

• Bank account statements

Instructions

1. Gather your family's recent bank statements and pay stubs.

2. Total all income earned in the past month. Note whether the income is regular income or if some is additional income earned through overtime or other sources. Base your budget on regular earned income.

3. Look at your bank statements. If a majority of your transactions are through your bank account, you will be able to easily budget your family's finances through the use of your account statements. List each expenditure and categorize the spending. For example, lump all grocery expenses together. Other major categories may include housing, automobile, insurance, debt, entertainment and utilities. Create a total for each category.

4. Note the difference between your income and your expenses. If your expenses exceed your income, look for ways to reduce your expenses to equal income and increase savings or reduce debt.

5. Eliminate unnecessary expenditures and shop for lower rates on insurance and, if you have a choice, on utilities. Bundle utilities, such as telephone, Internet and cable to save money each month on those services.

6. Save money at the grocery store by using coupons and shopping the weekly sales.

7. Project your spending for the next month based on your expense-reduction plan. Monitor your spending for the next few months to ensure that you and your family stay in line with your budget.

8. Revise your budget as needed to plan for future expenses or to account for any errors along the way.

Tips & Warnings

• Budgeting tools, some free of charge, are available online. Such a service may upload your bank account information and analyze your spending for you. These services are an easy way to create a family budget and quickly see areas in which you can reduce spending.

• While a budget is a great guide, it can become frustrating to maintain. Make sure your budget is reasonable and you will have more success sticking with it and meeting your long-term financial goals.

References

• Bank Rate: Create Your Family Budget
• Money at CNN: Making a Budget
• Kiplinger: A Budget for Today and Tommorrow

Resources

• Mint: Budgeting