Creating a budget is one of the first things you need to to do when trying to take back control of your finances. Money management all boils down to getting a handle on where your money is going and where it is coming from. The neat thing about budgets is that to view them positively is just to see them as a map to track down your finances and tell your money where it should be going. Family budgets help eliminate the guessing game and helps you see where you are throwing money away and where you can be saving it.
Family budgets can get tricky with the more people you add to your family. There are more expenses and more items to add to the list. Here is how to create a family budget that works for you and your family.
How to Create a Family Budget That Works
Determine your Income
Figure out where all of your income is coming from, and when it’s coming. Whether you work from home, work outside the home, have any part time businesses, or invest, take note of any income that is coming into the household so that you know what you are dealing with. If you have a variable income, it is best to create a budget around the average rather than try to create one each month.
Coming up with a plan for saving money should be one of the first things you tackle. Creating an emergency fund and a cushion for anything that pops up will ensure that you are prepared for any unexpected expense that might come your way. Designate an amount that you want to to go into savings first, so that you know what income you are left with to pay bills and expenses. You can even have your bank do this automatically if you get direct deposit.
Eliminate Debt and Unnecessary Expenses
Take a look at your expenses and see what it is you can start eliminating and removing from your household. It could be cable, your gym membership, or maybe one too many Internet subscriptions. Take the time to call up these companies, negotiate a better deal, or cancel all together. If you owe on a loan, talk to them about refinancing if you need to or make a system to get them paid off as soon as possible.
Schedule Your Payments
Once you are able to establish a saving routine as well as eliminate things you don’t need, the easiest thing to do is schedule payments that need to be made. This way you are able to know that you are not late for payments, and money that needs to be used for bills will already be gone and out of reach. It will give you piece of mind as well as some companies offer incentives or discounts for those that enroll in an auto-pay option.
Try the Envelope System
Whether you use actual cash in envelopes, or an online/phone program to keep track of your money, the envelope system is perfect to get everyday expenses under control. Designating every month how you will spend the rest of the income is the smart thing to do. Common categories you’ll want to put into envelopes are groceries, clothing, date night, eating out, household and gas. Once you designate the money and it’s gone, that’s all you get until next month.
Additional Tips for Creating a Budget
Stepfanie Cuevas has been a writer and blogger for the past 7 years. With working in social media, she has enjoyed the fact that you can connect with anyone from across the world. You can find Stepfanie at Stepfanie’s Desk.