In today’s economy it’s more important than ever to create and stick to a family budget plan. Creating a family budget plan is easy but it’s important to have the entire family on board with the plan. Although many will cringe at the thought, a family budget will help to keep everyone on track and still have some money left for play time.
Gather the bills together
Gather together a copy of all the bills for the last year. If the entire year isn’t available try for six months and go from there. The first thing is to see where the money is going and how much of it is going there.
Prioritize this list of bills. Start with rent or mortgage, electricity/gas, food and then go through such items as cell phone service, satellite or cable for television and other such items on your list. Put them in the order of importance. If a bill isn’t a fixed amount figure an average and use that amount for the amount.
While many people rely on using special worksheets or computer programs a good old fashioned system with pencil and paper work just as well and things can easily be adjusted with the tip of the eraser. Right now the most important thing is to get the information down on paper and have a look-see at what is going on in the family budget.
At the top of the page write in the net (take home) income.
The page should look something like this:
Take Home Pay
Rent/Mortgage; amount due; amount left after paying rent/mortgage
Utilities; amount due; amount left after paying Utilities
Insurance; amount due; amount left after paying insurance
Food budget; amount; amount left after paying for food
Continue the above list as needed for a family budget.
Make sure to prioritize the bills as to how important each one is. For most people the above would be very similar. In the middle column write in how much each bill is and in the end column write out the amount left from each pay period after deducting the particular bill. By keeping track of money in this fashion there will never be a question of how much money is available to pay off certain bills.
Every family budget should have a category labeled ’emergency fund’. This fund should be used for just that, emergencies. If someone is hospitalized, if the car breaks down, if an appliance breaks down etc. this fun will help the family to cope with the unexpected. This should be in its own category and only used for emergencies. Everyone will budget this category differently but the average suggestion is to have $1000.00 set aside for such events. This fund should be replaced as it’s used so make sure to only use it for a true emergency.
Create categories as needed
Each family will have different wants and needs. Some have never had satellite or cable television and are happy that way while others wouldn’t know what to do without it. Create categories for each and every item that is paid in a month just make sure to budget them in the order of priority. Don’t forget to set up some money for play time. This can be a vacation or a special family event but saving toward a goal like this is crucial to helping a family stick to the budget.
Once the spending has been written out, it’s easy to see where the money is going and plan the family budget accordingly.
Many people swear by such groups as Dave Ramsey and his debt snowball plan. They prefer to use cash instead of credit cards and use an envelope system to keep their budget on track. Others prefer to use a service such as Mint.com which is on online service that helps to track everything from bank accounts to credit cards. Both are easy to use and very helpful to consumers trying to keep track of a spending budget.
Setting up a family budget plan doesn’t have to be a painful experience, many families have fun trying to find ways to save money for a special trip or vacation.