Develop a personal budget to keep family finances on track. Use a budgeting software program or spreadsheet for easy analysis.
Many families find it is imperative to live on a budget. Developing a personal budget can be time-intensive. It often takes several months of attempting to stick to a budget before it becomes a habit for the family. Creating a budget plan and being adamant about following it can create a more sound financial future for the family.
Use a Budget Planner or Budgeting Software
No matter what system is used, it is important to develop a budgeting system. This can be as simple as pen and paper or as elaborate as an online budget software program or spreadsheet. Use what is easiest and most convenient. Those in the household who make financial decisions should be able to use the program and understand as they will have an impact on the personal budget.
Financial Budgeting Tips
Develop a personal budget by gathering all personal financial documents. To create a budget, pay stubs, as well as all bill amounts, will be needed. Write down a list of all bills that are due monthly. In this list, include bills that happen on a recurring basis. This includes the mortgage, electric, phone, cable, insurance, and vehicles payments. Next, list those bills that can be paid off with proper budgeting skills, such as credit card bills. In the beginning, list the minimum payment amounts for credit cards and other variable payment bills. After all other bills have been accounted for, it may be possible to increase the amount paid to credit card bills.
On a separate list, compile the variable expenses that occur monthly, such as groceries, entertainment, eating out, travel, and prescriptions. These amounts can vary monthly and can also be increased or decreased more easily than monthly bills such as a house payment or electric bill.
Create the Financial Budget
After the budget planner system has been determined and expenses have been recorded, enter monthly income after taxes and other allotments have been deducted. Then deduct all expenses, including set bills, variable bills, and extra variable expenses. This will result in a net income amount. This is extra money that can be funneled into savings, a retirement plan, or a debt repayment plan.
Be sure to include a cushion in the event an unexpected bill arises, or an extra tank of gas is needed that month. It is also wise to have a small amount of spending money for each family member that does not have to be accounted for in the monthly budget if this can be done without overspending.
If using a debit card or credit card results in more money being spent on variable expenses such as groceries and entertainment than the budget allows, consider setting up an envelope system. At the first of the month, put cash into an envelope for each category, and spend only that cash for those items. When the money is gone, no more can be spent until the beginning of the next month when the envelope is replenished.
Personal budgeting can be difficult in the beginning, especially if no budgets have been followed in the past. Create a budget, allow for some adjustment time, and financial rewards will soon be recognized. Work together as a family to secure a financial future.
Aside from your mortgage, your biggest monthly expense is likely groceries. And unlike your mortgage, your car payment and most of the rest of your bills you actually have some control over how much you spend at the grocery store.
Make A Grocery Budget
Start by tracking how much you’re spending on groceries for a few weeks. From there, come up with a weekly or monthly budget. Allot that money for groceries and whatever you do don’t go over.
Next, try cutting back your budget by $20 per month. Keep going and see how low you can go. The remaining tips will help you do that without feeling like you’re depriving yourself.
Keep A Price Book
Who doesn’t love a bargain or a good deal? They are all over the store, but do you know if what they advertise as a good deal is actually saving you money?
Keep a little notebook in your purse or keep a text document on your phone with the regular prices of the items you buy most often. Not only can you see if that “deal” really is a deal, you can also determine what kitchen staple is cheapest where and adjust your shopping accordingly. Your price book will also come in handy when you browse through weekly grocery flyers. You can decide if a loss leader deal is worth driving to the store long before you ever set a foot out the door.
Come Up With A Few Frugal Dishes
You don’t have to make drastic changes and eat nothing but rice and beans all week. Instead think of a few inexpensive dishes your family enjoys. They may be rice and beans. Or how about a big pot of soup or chili. Often meatless dishes will be your best frugal bet, or use meat in small portions on frugal dish days.
Enjoying frugal meals even just a handful of days during the month combined with using up any and all leftovers will make a big difference in your grocery budget.
Cut Out The Extras
Make a list before you head to the store and stick to it. All those little extras like the fancy bread from the bakery or the candy you grabbed at checkout start to add up. Get in the habit of skipping those extras unless there’s a good reason to buy them. Stick to your list and you’ll cut your grocery bill by quite a bit each week. It’s amazing how all those little extras add up.
Give these tips a try and see if you don’t start to see big savings on a weekly basis. What you do with all the extra money each month is up to you. Save up for a fun summer vacation, pay off those credit cards or start building your financial safety net.
It’s just a matter of time before it happens. The transmission blows on your car right around the time your daughter needs braces and your washing machine decides to call it quits. All of these are unexpected expenses and something we need to deal with throughout life.
Being prepared as much as you can is your best bet when live throws you a financial curve ball.
Do your best to anticipate upcoming expenses. If you’re driving an older car, or your dishwasher has seen its better days, start saving up to replace the item. You may also want to start keeping an eye out for good deals on the replacement.
An even better strategy is to have an emergency savings fund. Set up a savings account and add to it monthly. Use it only for completely unexpected expenses. Make sure you know what’s in the account. And once you have to take money out of it replace it as quickly as possible.
This brings us to a good point. Here’s how to recover quickly after that purchase. Go over your budget (you have one of those, right?) and look if you can temporarily cut back on some things. Stop ordering Pizza every Friday night and make your own at home. Skip a night out on the town and watch a couple of movies on Netflix instead of going to the theatre.
Use the money you’re not spending for the next few months to refill your emergency fund. For an extra boost, work a few hours of overtime, do a few freelance projects or temporarily pick up a part time job to get back on track fast.
But what do you do when the expense comes up before you had a chance to set up the emergency fund? Take a deep breath and assess the situation. Can you make do without the item for a little while? Just long enough to scrape together the funds to repair or replace it. If it’s the dishwasher, that’s easy. You can wash dishes by hand for a little while. If it’s the fridge or the car you rely on to get you to work each day, that’s a different story.
If you need the item that broke, evaluate if it would be less expensive to repair than replace. Even if it isn’t the perfect solution, it may get you to work until you can safe up for a different car. Shuffle your money around and if there is no other option charge it to the credit card and get to work. Your one and only goal right now is to pay off that expense. If you stick every penny of discretional income in, it won’t take you long.
One your bills and credit cards are paid off, do what you can to get that emergency fund set up. Because you know something else will break down the road.
We work hard to earn a living. We should make sure we spend the money we bring home wisely. That’s where a household budget comes in. It’s a good tool to see at a glance what we have coming in, what’s going out (and what that money is paying for) and if there’s anything left at the end of the month to put into savings.
Before we dive into exactly what a budget can do for us, let’s consider for a minute what will happen if we’re not tracking income and expenses. We may end up spending more than we’re making in a given month (or two, or three). Over time that can put us into some pretty hot water financially. We may also spend a lot more than we’d like to believe on things like eating out, going to the movies or new clothes.
Having a budget gives us more control over where we want to really spend our hard earned cash. Maybe that’s dinner and a movie, but maybe it isn’t. Wouldn’t it be nice to have an actual choice?
It Tracks Where Your Money Is Going
A budget simply tracks your money. You record where the money comes from each month (your income) and then write out everything you spend it on, starting with your regular monthly bills like mortgage or rent, car payments, utility bills etc. What’s left after all the bills are paid is your discretional income.
Helps You Identify Things You Waste Money On
Having it all in front of you in black and white helps you identify things you’re wasting your money on.
It makes you reconsider if you really want to spend well over $200 a month on Cable TV or $150 on your large cell phone plan. Or how about that yearly magazine subscription to something you no longer read? Go through your expenses and reevaluate if this is REALLY how you want to spend your pay check.
Allows You To Be Proactive About Savings
Saving money without a budget is hard. We go in with the best of intentions at the beginning of the month, but somehow there isn’t anything left at the end of the month.
A budget gives you a chance to be a bit more proactive. Set aside some money for savings at the beginning of the month, even if it’s just $20. Put it in the budget as a regular expense, just like you do with your other urgent bills. If you need to, open a separate savings account so you’re not tempted to spend it.
Ensures You’re Not Spending More Than You’re Making
Most importantly, your budget will keep you on track and help you make sure you’re not spending more than you’re making. And I don’t have to tell you that that’s pretty important for your financial wellbeing.