How to create a Family Budget
Creating a Family Budget is diffirent than creating a budget for a single person. For singles creating a budget is pretty simple. A single person can easily track their expenses,as they only have their own to worry about. But creating a family budget will take some work.
Most families have multiple incomes which equals multiple spenders, here is what causes confusion and presents a challenge. This is why a lot of families don't have a budget,but if you incorporate one and are able to stick to it can greatly imporve your familiy's financial success.
It's a little tricky but it can be done. Here's how:
1) Figure out your income from all sources. If a source of income fluctuates (like my website earnings)
use the lowest amount or average it out.
2) Try keeping a track of all your (family) expenses for a month. Save all of your reciepts and have family members turn in all the receipts or tell you what money was spent for each day.
3) Add up your monthly expenses. You must include your mortgage or rent,debt payments,groceries,haircuts, and everyday expenses like transportation costs (car/public transportation) and lunch money.
4) Get your family's input on how to trim the budget. Getting input from the family will help you determine which expenses are necessary, and which expenses can be cut down or all together eliminated.
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5) In addition to individual expenses, discuss how you can cut down on household expenses like the electric bill, water bill, groceries, and other necessary family expenses, that won't go away but can be reduced. Think about carpooling to work,
buying generic brand foods,
buy in bulk,
start a pantry
or simply wearing a swearter around the house instead of a t-shirt during the winter months.
6) Estimate how much you can save on regular expenses, and completely cut out unecessary items out of the budget. Recalculate it and see where you stand.
7) If you end up with a few bucks at the end of the month, put it in savings. If you're in the red, go back and rework the budget until you have more income than expenses.
Let's Be Realistic
The number #1 reason family budgets fail is because they are not realistic. We can all cut down on expenses but sometimes we might go too far. Like totally cutting out all entertainment expenses as we all need some Family Fun.
Instead of cutting expenses out of our budget totally, try finding ways to lower the costs. Instead of dinner and a movie 4 times of month try 2 times a month. Better yet rent a new movie release and order a little delivery or take-out
(with a coupon of course)
and you will save even more money.
Individual expenses can be tricky. You should try allocating a certain amount of your money for each member of your family for the week. If someone spends more that their alloted amount before the week is up, reevaluate his or her expenses and adjust if necessary. If he or she is not follwoing budget spending than an adustment is not necessary, maybe just a lecture will do.
Creating a Family Budget can help keep spending under control, leaving more money to pay down debts and save for future goals. But in order to succeed, close monitoring is essential. Your efforts will be rewareded with less financial stress and more money in the bank