Knowhow-Now Article

Effective Budgeting Ideas for Families

By Mike Hirst

Mike Hirst - Author

Working and providing for your family’s needs is just one side of the coin. The other half of the struggle is to try juggling the money and making sure that every priority is met.

One sad fact is many families are barely able to make ends meet. Living from paycheck to paycheck has become a dilemma more so with the economic instability and rising prices of commodities. Nevertheless, regularly keeping a family budget can be the best solution for these concerns.

Instead of simply spending everything and getting broke before the next salary, a planned budget can help you to proceed with caution from month to month. You will have lesser worries and you can increase your family’s financial security if you know how to take advantage of effective budgeting tools.

So, how do you create a monthly family budget? It’s actually very easy. The first thing you need to do is to compute all your family’s possible income sources. This includes regular salary, child support, investment income, and others. Record all the amount of money you expect to have for the month and add them up to get the grand total. This step lets you get a clear overview of what you have and then set limits accordingly that’s why it’s very important. However, it would be a good idea to add the total after taxes or other deductions. This means getting the net worth of all income only.

budget graphic

Once you’re done, the next move is to write down all the necessary expenses. This is where you list down all the bills and other regular expenditures such as electric bill, car payment, mortgage, transportation, and more. Take note, though, that you only need to list necessary expenditures. These are expenses the entire family benefits from or consumes on a monthly basis. All other expenses, particularly those that individual family members consume for his or herself must be left out of the list. By having these figures, planning your money’s direction will be easier. This part of the budget also makes a good discussion for the family. Parents should take the time to teach their kids about the importance of being thrifty by letting them see the monthly income and the total amount of anticipated expenses.

Now the part that will consume your time the most is the need to record the total amount of money spent each day. People are often surprised to discover that they spend more than they suppose and that’s where having a family monthly budget can help. Without it, living within your means can be harder and you’ll always end up with increasing debt. To avoid these risks, it is sometimes necessary to make changes with your expenses. You really need to track where your money goes and you may have to implement some adjustments to make ends meet. We’re sure you don’t want to experience the tendency of spending more than you can earn. Consistency in recording information and doing it on a daily basis is crucial for you to secure your family successfully.

happy man with successful budget plan

Last but not the least, you need to write down the difference between the projected and actual expenditures. These details can be precious because they give you an accurate overview of your family’s spending habits. This would determine whether all the family’s income goes towards needs or if there would be little left over for some wants. Consequently, it would also help you realize whether there are still enough funds left to open up a family savings account (if you haven’t got one yet). Needless to say, this information can guide you as you create a new family monthly budget for the upcoming months.

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