Family Budget   

The idea of having or making a family budget is often confusing.  If you’ve tried to make one, you may have found it frustrating when you realized that one wrong purchase can ruin the entire thing.  And it’s such a headache to keep track of everything. So how can you make it work for you?

First, do a complete overhaul with how you think about a family budget.  If you can change your mind so that you think of it as a household help that is a blessing, you may begin to feel differently about it.  

Have any plans for the future? A special holiday or occasion that will require extra expenditure, let alone paying for nursery school, high school sports or proms, college, or just want to pay down your mortgage earlier are all good goals, just as simply wanting to build a bit of a savings plan or have all your bills paid on time. 

A well planned family budget is a great way to keep track of your family's expenditures and help you evaluate the things that you spend the lion's share of the family's earnings on. So that you can make those plans and see them happening.

What is a family budget?  It’s a tool for handling your finances. It helps you to identify all cash in and cash out, controls family expenditures so that there is money is enough to pay bills and ensuring that savings are set aside for future expenses - vacations, or children's education, or even for retirement.

Try these simple steps in preparing a no fuss family budget and see the benefits of intelligent spending.

1.  Average your pay. Gather three months of your pay stubs and work out your average monthly earnings. Add up the total and divide by 3.

2.  Average your bills. Get out three months of your monthly bills.  Do this for the fixed expenses like the rent, phone bill, car payments and other loans that come monthly.   Add them up and get the average. Do the same for other expenses like groceries and credit card bills.

3.  Evaluate the results.  Look at your average monthly earnings against your monthly fixed expenses and other monthly expenses. Do they match?  Is there enough for a savings fund? If not, think of some ways to economize.  Cut back on items that are unnecessary or cut back if too much money is being spent in one area, like eating out or clothing.

4.  Plan.  Knowing the facts of your income and expenses, and where you can cut back, pre-plan next month’s spending by developing a family budget that shows how much you will spend on each category, including a savings plan.  Work hard to stick to this monthly budget.

5.  Save. Now that you have a monthly budget, set up a savings account.  Save up by making regular deposits to this account.

6.  Assess and Fine tune. Keep track of this monthly plan just to see if it is working for you.  Try to fine-tune the "rough edges" of this budget as you go along. Remember each season of the year has different expenses so allow for fluctuations.

7.  Go High Tech. If you can, purchase personal budgeting software or spreadsheet application to keep record of your budget.  This will make organizing your expenses very easy. If you want to plan for a solid financial future, the reports you get with them are invaluable.

These are the basic steps in developing and implementing a no fuss, easy to stick to monthly financial plan. Of course each family has diverse needs and wants.  You have the freedom to develop your own monthly family budget, depending on your family’s financial background and needs. 

No matter how you do it, just focus on the end result, which is building a savings that leads to a bright and financially stable future for your family.

Best Pennywise Tip: Get the whole family involved. Not only will you set a good example for your children and teens, and they'll learn a valuable skill, but when everyone has a say, you’re more likely to have their cooperation.

 I can remember choosing something very unnecessary when I was shopping with my teens one day. That item barely hit the bottom of the shopping cart before one of my boys had lifted it out and replaced it on the shelf without a word. I admit to having mixed emotions at the time – but humor prevailed!

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