Typical Family Budget - Small Steps Equal Big Savings
April 30, 2007
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Have you ever noticed that a week after payday your pockets are nearly empty? Without a family budget, this could be you. Keeping track of your income and expenditures is important to keep a family afloat. Set up a family budget.
To start the budget process gather your check stubs from the previous three months. If any other money is coming into the household on a regular basis from month to month, this should be included also. Average the numbers to come up with a total monthly income.
Make a list of the monthly bills. This list should include: mortgage/rent, all utilities listed separately, food allowance, school lunches for the kids, car payments, gas, insurance payments, childcare, monthly medical costs, and credit card bills. If there are other monthly allowances you need to add, put these on the list as well. Record the payment amount for each expense. Most utility companies will work with you to set up an equal payment plan so that you can budget for the same amount each month.
Add up the monthly bills. This is the total amount of money you will need each month to pay your bills. Subtract this amount from the actual income you expect to make. If the result is a negative number, then you need to find a way to bring more income into the home. And, if the difference is to the good, the family must decide what to do with it.
Before you panic about outcome, see where you can cut costs on bills. Paying bills on time will avoid late fees and penalties that can add up to less money in your pocket. Give your children a set amount of money each month for school lunch. If they go over their budgeted amount, then they have to pack their lunch for the remainder of the month. Opt to use the dependent care spending account at your job to pay the cost of daycare.
With the money that is leftover, set up a line item for entertainment, college savings, and miscellaneous expenditures. In the entertainment category, seeing a matinee movie instead of one at night will save money on the total cost of a night out. Miscellaneous expenditures include car repairs, haircuts, kid’s allowances, and home repairs.
Once you’ve plugged in the numbers, the hard part comes. Get the family to commit to the new budget for two months to see how it works. Track the actual money spent on each item. If you are under on some and over on others, adjust the amount of money allotted to those items. Whatever you do, don’t scrap the budget. If you are diligent, it will keep the family in the black.
Grab your Mom’s Talk Guide to Family Budgeting - Step-by-step guide to help you establish a workable budget.
Posted by admin | Filed Under Money & Finance
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