The Importance and Benefits of a Family Budget
Family budgets are an important factor in every day life. By planning, and setting up a family budget you will be putting your family on track to a successful future. It is very stressful right now for most of us when we constantly hear about how bad the economy is or is getting. The price of gas is climbing, and with this so is the price of every thing else. We may not be able to control the economy and its fluctuations, but we can control how we manage and spend our money. When you have a budget set in place you will be better prepared to face the economy and it's surprises head on.
There are a lot of people in the position of living paycheck to paycheck, and trust me that is not a pleasant experience. By setting up a budget you can delegate how much of each pay is to be used for bills and every day necessities. When planning your budget you should always place some money aside into a savings account, even if it is not much, so if the price of something does rise you will be able to handle it with less stress.
Plan your budget
You will need to sit down and make a list of all your monthly expenses. You will want to list all the bills associated with your home, vehicles, food and other necessities, and any other thing you will need to have cash for. An example of someones list may look similar to this:
- mortgage (last step from below) due 12th of month, $320.00
- electricity due 15th of month, $123.00
- phone and/or cell phone
- house insurance
- etc., etc.,
Every household's list will be similar yet different, so just be specific to your family. Also jot down other items you will need to purchase each month.
- food about $400.00 per month
- toiletries about $70.00 per month
Once you have an accurate list I would suggest adding two more titled; miscellaneous, and savings. The miscellaneous could be for something you may come across in the future that you forgot about at the time of planning your budget, or it can be for those expenses that only come around once in a while. The savings should be a monthly commitment, even if you can only commit to put in $10 a month. The money will add up and will be there if absolutely needed.
The last step in this stage is to gather all the information about the items you listed above, for example; the date the bill is due, how much it costs, etc. For the other items figure an estimated amount that you can delegate to each one. I gave two examples in each section above.
Build you budget
Once you have all your information figured out you can place it into a budget. Alot of people think this is hard, but it is quite the opposite. All you need to do is take the information you have already written down and place it in an organized form. You will list your monthly income and sources in one column, and your expenses and the cost for each in another column. You then add up the columns to get the complete monthly total for both the income and expenses. Your income needs to be equal to, if not more than, your monthly expenses. If the expenses would be higher you will need to see how you can adjust certain costs or save in some way on one or a few items listed. The only other choice would be to have another source of income coming in, which more than likely will not be feasible.
Example of Budget Chart
Total Monthly Income
Total Monthly Expenses
The budget chart above can be formatted to fit your specific needs. I grouped all household bills into one category just for an example. You would be more specific when mapping out yours, for example: Electric Bill -- Due on the 8th -- $126.00, this way you can keep a more accurate record of all your expenses and exactly how much money you will need week to week from the income. When looking at the food costs you would just take the monthly amount and divide it by 4. So if you have $500 per month to spend on food, you will then know you can spend $125 per week.
A budget can help you save
A budget can be a great way to help you save for your families future. By designating a specific amount to place in a savings account no matter the size, will ensure you have money in the future. If you can aim for $20 a month by the end of the year you will have saved $240, plus interest. You can also place any money you didn't spend each month into the savings. For example, you have $200 budgeted for gas, but only spent $150, you can then take the $50 and place it in the savings account.
You should stick closely to your budgeted amount for each area every month. You may even aim to come in slightly lower than the amount budgeted in order to save money each month.
Success and your budget
When you are setting up your budget be sure to use numbers that closely match the actual amount of each item. If the numbers are completely different you will not have an accurate budget and it may not help. Also remember that things can change, being income or expense amounts, so make adjustments as needed to get the best results. Do not get frustrated!!! It may take you a couple of days, weeks, or months, to get your budget correct, just keep making your adjustments and stick to it. The budget will pay off in the long run for your family, and when you start to see your savings grow it will give you a new sense of success!!!
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