Raising a family can be expensive. Football team fees, school books, baby formula, nappies, toys, clothing, shoes, home renovations, family holidays, gifts, trips to the cinema, summer camp costs, art supplies, sports clothing, air conditioning, water and electrical bills, petrol, car insurance, shopping, dental check-ups, haircuts, and endless loaves of bread and cartons of milk all add up to a never ending stream of expenses. The average cost of raising a child to the age of 21 has been estimated at $280,000, including education and childcare.

 

 

Manage The Expense

To manage your family’s expenses, it is a great idea to have a budget. Making a budget for your family is a way to track how much money you and your partner and bringing in, and how much you are spending. Once you are aware of these two totals, you can look at your expenses and find out ways to reduce spending and save more money.

 

Here are the steps to creating a working family budget:

 

• Use a piece of paper or a spread sheet on your computer, which ever you feel more comfortable with.

 

In one column, list all of your income. This is not your salary, but your actual net income that you and your partner take home after taxes. Be sure to include any other sources of income side as a side business or royalties.

 

In the second column, list all of your outgoing expenses. Some of these will be fixed costs that are always a certain amount per month, such as your mortgage payment or rent, or your car payment.

 

Other expenses, such as your food and utilities, will have to be estimated by the month. To do this for food for example, look back on your bank statements for the past several months and look at how much you have spent each month at the supermarket. Calculate an average of the last several months, and put this down as your budgeted amount for food. Do the same with your recent utility bills, your entertainment expenses, your clothing, etc.

 

Next, include any other large one-time purchases you will need to make in the coming year, such as paying for a child’s school trip or buying your child a new bike.

 

When you total the amount of money you are bringing in from the first column, and the amount of money you are spending from the second column, your expenses should be less than your income. Many people are shocked when they total up their expenses, because they don’t realize how much money they are actually spending each month!

 

Now that you have a monthly budget, don’t forget to stick to it and watch your spending so that you don’t go over the amounts which you have put down on paper.

 

Now, you can look at your expenses column and see which of the things you spend money on could be eliminated or reduced. Could you cut down the cost of your weekly shopping trip by buying cheaper foods in bulk and eating leftovers more often? Could you watch a film at home instead of taking the kids to the cinema? The more you cut down your expenses, the more extra money you will have at your disposal.

 

What you do with the money you save from making a budget is up to you. You could save it towards your child’s education, or spend it on a family holiday. Either way, a budget allows you a clearer picture of your finances so that you are not spending money on things that you don’t need and can save for your family’s future.

 

Elena Price writes for sites such as Fiscal Muses and enjoys writing about ways of saving you time and money, Ulster Bank’s mobile banking service is an example of such.