What’s The Big Deal About Family Budget?

 

In times like this when cash is relatively hard to come by and bills are mounting everyday, talking about a family budget may seem unthinkable for many couples. It is equally frustrating to see how hard it is to do a budget and realizing that with one wrong purchase, you can actually ruin the entire thing. And this has been a constant problem for most marriages.

But is budgeting really necessary? Indeed, a little planning can actually be a great way to keep track of your family's expenditures and help you evaluate the things that you spend the lion's share of the family's earnings on.

A budget is simply a way of handling your finances by controlling the family's expenditures in a way that money is enough for paying up bills, and still ensuring that savings are set aside for future expenses - vacations, or children's education, or even for retirement.

Here are uncomplicated steps in preparing a simple family budget, and see the benefits of intelligent spending.

1.         Gather three months of your pay remnant and get your average monthly earnings.

2.         Get out three months of your monthly bills. Do this for the fixed expenses like the rent, utility or phone bill, car payments and other loans that come monthly. Add them up and get the average. Do the same for other expenses like groceries, and every day bills.

3.         Evaluate the results of your computations.  Looking at your average monthly earnings against your monthly fixed expenses and other monthly expenses, think of some ways to economize.  Cut back on some items that are somehow unnecessary.

4.         Knowing the facts of your income and expenses, develop a family budget and try to stick to this monthly budget.

5.         Now that you have a monthly budget, set up a savings account.  Save up by making regular deposits to this account.

6.         Keep track of this monthly family budget just to see if it is working for you.  Try to fine-tune the "rough edges" of this budget as you go along.

7.         If you can get hold of a personal budgeting software or spreadsheet application to keep record of your budget, the better.  This will make organizing your expenses very easy.

These are 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 savings that leads to a bright and financially stable future for your family.