Having a household budget for the family is essential to meeting financial goals, but many of us don’t know where to start. Simply taking a look over your finances can alert you to many places where money slips away. Once you take a moment to sit down with your expenses and follow these tips you’ll be well on your way to a healthy family budget.
Get your Records in Check
Keeping your financial statements and credit card statements in order is usually the biggest hurdle people have to overcome when it comes to starting a budget. Come up with a filing system that makes sense for your bank and credit card statements. The simpler the filing system the better, you’ll be able to stick with it much easier if it’s straightforward. Keep a file folder for statements from each bank/checking account, one for each credit card account, and one for each category of expenses. File the past years’ worth of statements and expenses in this manner and continue doing so going forward.
Most of us seem to be unaware of where most of our money is actually going, and find we’ve run out at the end of the month. The most important part of starting and keeping a budget is finding where the money is going. Start tracking expenditures by using a log book and creating a list that factors in variable monthly household expenses, emergency household expenses, and household expenses that happen quarterly or throughout the year. Tracking these expenditures will help you eliminate charges you incur due to having disorganized financials (late fees, overdraft charges etc.). Tracking expenditures for a 12 month period is a good way to assess how much your daily activities and household activities cost.
Assess the Result
After totaling up how much the household expenses cost you over the year, in addition to variable expenses throughout the year you’ll be able to see how that aligns with the income. Hopefully you’ve found that you’re coming out on top with some money left over, but if not this is the time to see where you can save money to flip the scales in the opposite direction. Implement a good bill paying system to avoid late fees, and reduce the stress of unexpected or forgotten bills. Assess what you are buying monthly that isn’t an absolute necessity and find ways to reduce those expenditures from small food items to luxuries.
Set Goals and Stick to them
Set goals for the family to encourage everyone to remain actively committed to the budget. These don’t need to be unreasonable goals, in fact, the simpler the goals the better. Long range goals are great too, but sometimes it’s easier to start off with a few smaller short term goals to get the ball rolling. This could even be something as small as making certain items last longer such as butter or coffee.
Build a budget that works for your goals and family and your lifestyle. It may not happen overnight, but with some realistic goals and self-discipline it’s easy to start a budget you’ll be able to stick with. Once you’ve got a budget going you’ll find many financial stresses alleviated and your savings account will begin to grow.