Developing a Family Budget

A family budget is a necessity in any household. It is important to agree on a certain amount of money to be spent and how the money should be divided up. Without a budget you can not save and you can not get out of debt. Creating a budget will allow you guidelines to keep your finances in check.

Determine Your Monthly Income

You need to know how much money you bring home every month. look at your paychecks and see how much you make after deductions and taxes. Be sure you are contributing to your company retirement plan. If your salary fluctuates, look at how much you made in an entire year and divide that by twelve to see an average monthly salary.

Add Up Your Expenses

You need to look at your family's expenses to see how money is going out every month. Your fixed expenses like rent and debt payments are going to be the same every month. Other expenses are variable and can fluctuate every month like food, gas and electric. You can estimate how much these will be every month by tracking how much you spent on them over a period of a few months.

Track Your Spending

Other than monthly bills, you need to look at where your money goes every month. It maybe eating out, shopping or entertainment. Write down every thing you spend money on for an entire month. You may be surprised how much you spend on little things like a daily coffee.

Balance The Budget

Once you have determined your income, bills and other expenses, it is time to see what the bottom line is. If you have money left over every month, then you are in good shape. You may still want to cut back in certain areas to allow more savings. If at the end of the month you are in the negative, then you need to find out where the leak is. Having a negative number means you will likely be in debt if you already are not. Look at your expenses and see where  you can cut back. Perhaps you have too many extras like a gym membership, cable and internet. You may make enough money but your spending is out of control. Consider having one bank account where your bills are paid and your savings are, and another account with a debit card for miscellaneous spending. You can also implement the envelope system, where a series of envelopes are used with cash only, and each envelope holds a designated amount of cash for food, gas, etc. When the envelope is empty, there is no more spending in that category. You have to find a method that works for your family and keeps you all accountable for your spending and saving.

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