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3 Ways of Budgeting For Families

Updated on July 17, 2011
Put your family on a budget
Put your family on a budget | Source

Putting yourself and your family on a budget is an excellent way to prepare for the future and ensure that you and your family have always got a pile of cash in hand when you need it for an emergency. MONEY – It's what you want!

Fact # 1 – We all need money

Fact # 2 – No matter how much money one has, if it is not spent wisely, one can end up in financial troubles

Fact # 3 –Though money cannot buy happiness, the lack of it can cause great distress.

Money in itself should never be the focus of one’s life, but budgeting should surely be. There is one nice saying regarding this, “to sleep comfortably, do no stretch your legs further than your mattress”. It should never be about how much you have, but rather, how wisely you spend it and where you invest it. With shopping malls going up at almost the speed of light and pressure from kids to buy the latest gadgets and fashion trends, it is no wonder you often find yourself with an empty wallet at the end of each month. There are just too many things to buy and unfortunately not enough cash to buy them. However, budgeting is not an easy task. It can often be dreadfully painful, as it requires a lot of self sacrifice, which will ultimately pay off in the end. Budgeting, your own money requires intense scrutiny into your spending habits and sources of income. It may seem like a pain in the beginning but soon it will turn into a habit that you will be thankful to have formed. Trust me on that. We all know, money that is accessible easily like that we get from parents or relatives and money that we earn ourselves are totally different. Imagine end of the months being the toughest and yes allocating money for your unexpected needs such as emergencies, accidents, health, or savings for a future ordeal such as buying house, child’s marriage, and kid’s education. So below are just three ways of budgeting for families:

First things first

The first thing you must do is to determine how much money you spend each month and I mean every single cent. Grab a notebook and dedicate it completely to your budget. Write down everything you spend on a daily basis. That means how many designer coffees you indulge in each month and even how many times you go to the bar for a beer rush. It all counts. Make sure to include all your family clothes, entertainment, and food expenses as well. Now add it up. Surely, you will be shocked to know how much you really spend each month.

Sources of Income - Spending Habit

Sources of income include monthly salary of a serviceman or monthly income of a businessman. When budgeting your family, you always have to make sure that you do not spend more than what you earn. So, purchasing on credit cards is an easy way to get into trouble fast as you can seemingly spend as you like without remorse. But things will add up at the end of the month and you may just find yourself in debt. Do no rely on your credit card as a source of income because it is not. A source of income is only REAL CASH that comes right into your hands, not credit. Now comes the painful part. You have to determine what your REAL needs are each month and cut all trivial purchases out of your budget. That means all the trips to your favorite fast food joint, trips to the cinema or splurging on little trifles that you really don't need, have to be cut completely out of your budget even your chocolates, ice creams, video games, expensive drinking and dining habits, and story books. Once you get your budget under control, you can slowly start reintroducing your favorite expenditures, but only when you can afford them.

Cash Only Purchases

Just because you are on a budget does not mean that you can never take your family for shopping again. All a budget means is that you don’t spend your money as fast as you acquire it and you make conscious decisions with your money. When you absolutely want to buy something, then you should only pay with cash and not credit. And the cash you use should have been acquired over a few months to ensure that once you make the purchase, you still have money left over to get your family through the rest of the month.

So the next time you see a great new mobile or latest Ipad in the market, just don’t go and buy it, wait till you can afford it and still afford food for family on the table. There are two advantages for this, one you will have enough money for family for rest of the month; and two the price of your favorite mobile or ipad will drop down by half.

So above were a few ways of budgeting for families. In my upcoming articles, I will share some ways of budgeting for college students.

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    • soni2006 profile imageAUTHOR

      Rajinder Soni 

      7 years ago from New Delhi, India

      Thank you Mandeeadair, and credit cards make it possible, spending before you have the money, and when the time comes to pay off, we have more unplanned expenses which ruin our budget making it impossible for us improve our family finances.

    • Mandeeadair profile image

      Mandeeadair 

      7 years ago from California

      Great hub, so true about cash purchases! Spending before you have it is a dangerous habit. Thanks for the hub, very useful!

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