ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

A Family Budget

Updated on October 18, 2014

Planning a Family Budget

A family budget is a plan for the future based on an estimate of total income and probable monthly expenses and savings. A written plan, which can be revised when necessary, helps in figuring the budget. Using a spreadsheet program, such as Microsoft Excel (or if you're on a tight budget you can download OpenOffice for free) can help you keep track of the expenses with ease.

The family budget is a plan for use of expected income and other resources for spending, saving, and sharing. The budget for the next period (for example, a month or a year) is part of a family's long-term financial plan for supporting itself through the life cycle, educating the children, and also allowing for contingencies.

A budget is a personal plan specifying how money is to be spent over a designated period of time. Its purpose is to encourage the efficient use of money by preventing waste.

Why Families Budget?

The family prepares a budget to obtain maximum satisfactions from use of income by providing first for the most important expenditures. A budget also serves to balance outgoing expenses with income and to develop family cooperation on money matters.

Families budget their incomes to provide for daily necessities, costs of emergencies, periods of reduced income, and daily comforts and luxuries. They also budget for large pleasurable expenditures such as vacations, for advanced schooling, for support of the heads of the household in their old age, and for sharing with others outside the household. Repayment of debts or accumulation of assets may also be goals.

Without careful budgeting, a family can dissipate a good income so that there is not money for larger items of furnishings, a down payment on a home, special schooling for the children, or the needs of the parents in their old age.

How to Plan a Budget

A budget starts with a written plan for weekly or monthly spending for a definite period of time, most often a year. This plan is made by estimating the amount of income that will be received and estimating short-term and long-term expenses that must be covered by that income. The second step in keeping a budget is to set up a written record of money actually spent. The final step is to compare the planned budget with actual spending.

Everyone has a number of immediate financial responsibilities and certain financial objectives. In planning a budget, a person should keep both his immediate and his long-range objectives in focus. Before a budget is written up, the following questions should be asked:

1. What personal traits and abilities are likely to influence my earning, spending, and saving? (For example, a person with a good salary may lack the self-discipline to save for the future.)

2. What earnings can I anticipate for the future?

3. What are my financial assets and liabilities?

4. What are my long-term financial objectives? Retirement? Home ownership? College education for my children? A trip to Europe?

5. What insurances do I need?

6. How much money should I save from current income to take care of future needs?

Dome Home Budget Book

Dome Simplified Home Budget Book, 7 1/2in. x 10 1/2in., Teal
Dome Simplified Home Budget Book, 7 1/2in. x 10 1/2in., Teal

64 pages with a wire binding, and vinyl cover.

Keep accurate totals of income and expenses that will have you on track and saving money.

 

First Steps in Making a Budget

Before constructing its budget for the next period, the family needs to develop long-term plans for raising a family, educating the children, and supporting itself, as well as plans for the way of living, savings and investments, and contributions to others through the family life cycle. Consideration is given to which goals are most important and which are less important. Some goals are for next year, some for 5 years, and some for 20 years.

In preparing the budget for the next period, the first step is to estimate income month by month from all earners and sources. The next step is to list required deductions from income such as taxes and job expenses, as well as contractual obligations for debt repayment and insurance. The remaining income is then budgeted for savings and investments, gifts and contributions, and, most importantly, for spending on food, shelter, transportation, clothing, and other items.

When expenses for living exceed available income, the family may try to reduce some expenses. Additional members may take full-time or part-time jobs. Or it may be necessary to decrease gifts and contributions, savings and investments, or monthly payments on the home and other indebtedness. In old age or emergencies the family may have to draw on its accumulation of savings. The family may make purchases on time payments to level out expenditures over a longer period.

Printing Calculator

Sharp EL-1750V 12 Digit Compact Desktop 2-Color Printing Calculator
Sharp EL-1750V 12 Digit Compact Desktop 2-Color Printing Calculator

Two color printing calculator with a large easy to read 12-digit LCD. Prints in red and black. Includes the Sharp EL1750P calculator, AC adapter, heavy duty metal paper holder, paper roll, instructions, and warranty information.

 

Obstacles to Budgeting

Some of the reasons why so few families operate on budgets are that results are hard to see, the effort seems too great, members of the family do not wish to record what they spend, or family income is irregular and hard to predict. Also many people believe that a pay raise is the only way to increase the amount one has to spend. A man can quickly see $100 a week added to his $900 pay, but it requires budgeting experience to see that $900 might go much further through proper budgeting.

The Envelope Budget

After a year's expenses have been estimated in advance, the annual budget items are divided by 52 and provided for by putting aside the cash necessary for each item each week. The money is placed in marked envelopes. As the cash in the envelope is used, receipted bills or slips noting what the cash was used for are put into the envelopes.

Create a New Year's Budget

Share Your Budgeting Tips!

    0 of 8192 characters used
    Post Comment

    No comments yet.

    working

    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: https://hubpages.com/privacy-policy#gdpr

    Show Details
    Necessary
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
    Features
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Marketing
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Statistics
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)