Friday, July 14, 2006
Planning A Realistic Family Budget
Planning budget drives some people up the wall. Not only is it hard to do a budget, but one unplanned purchase can actually ruin the entire thing. And until now, relief was nowhere in sight.
What is needed is a change in perspective towards budgeting. Budgeting is the best way to keep track of your family spending habits and help you recognize where the bulk of you money is going.
So then - just what is a budget? Think of it as a tool for handling your finances by monitoring and controlling your family's spending in a way that there is money enough for paying the recurring bills, and still having enough left over for savings, retirement and leisure activities.
Here are seven simple steps in preparing a realistic family budget:
1. Collect three months of your paycheck stubs and compute your average monthly earnings.
2. Dig up three months of the bills you pay every month - rent, phone bill, car payments and other expenses that come each month. Compute the average amount of your payment. Then, do the same expenses that vary from month-to-month such as groceries, dry cleaning.
3. Go over the results of your computations. Looking at your average monthly earnings compared to your monthly fixed expenses and other monthly expenses. Can you think of some ways to economize? How about cutting back on some items that are somehow unnecessary? Before you buy something, ask yourself "Can I do without it?"
4. With the knowledge of your income and expenses, develop a family budget that matches.
5. Include in your budget a savings plan and make regular deposits to this account.
6. Monitor your progress to see if it is working for you. Fine-tune the "rough edges" of this budget as you go along but don't slack off.
7. While not necessary, using personal budgeting software or spreadsheet application to record your budget, it will make organizing your expenses very easy.
So there you have it - the basic steps in developing and implementing a no fret, easy to stick to monthly family budget. 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 bright and financially stable future for your family.
What is needed is a change in perspective towards budgeting. Budgeting is the best way to keep track of your family spending habits and help you recognize where the bulk of you money is going.
So then - just what is a budget? Think of it as a tool for handling your finances by monitoring and controlling your family's spending in a way that there is money enough for paying the recurring bills, and still having enough left over for savings, retirement and leisure activities.
Here are seven simple steps in preparing a realistic family budget:
1. Collect three months of your paycheck stubs and compute your average monthly earnings.
2. Dig up three months of the bills you pay every month - rent, phone bill, car payments and other expenses that come each month. Compute the average amount of your payment. Then, do the same expenses that vary from month-to-month such as groceries, dry cleaning.
3. Go over the results of your computations. Looking at your average monthly earnings compared to your monthly fixed expenses and other monthly expenses. Can you think of some ways to economize? How about cutting back on some items that are somehow unnecessary? Before you buy something, ask yourself "Can I do without it?"
4. With the knowledge of your income and expenses, develop a family budget that matches.
5. Include in your budget a savings plan and make regular deposits to this account.
6. Monitor your progress to see if it is working for you. Fine-tune the "rough edges" of this budget as you go along but don't slack off.
7. While not necessary, using personal budgeting software or spreadsheet application to record your budget, it will make organizing your expenses very easy.
So there you have it - the basic steps in developing and implementing a no fret, easy to stick to monthly family budget. 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 bright and financially stable future for your family.
