Creating a budget is easy if you’re single. Being just one person, it’s easy to know how much you’re making and what you need to spend on. But when you have a family, creating a budget gets a bit more complicated. Perhaps there are two incomes and there are surely going to be many more expenses. Though the task of creating a family budget is more difficult, one should not be discouraged enough to create one. Having, and sticking to, a family budget is key to having a healthy financial situation. Here are some tips on how to create a family budget.
List all the income from every family member. If the income varies month by month, use an average of the last 6 months. Knowing how much each of you brings in is crucial because you can’t go over this amount in any month.
It’s impossible to know what all of your expenses are off the top of your head. Sure, you may know about all of the bills, but you don’t know about all of the day to day expenses each family member makes. That’s why it’s important to note down every expense that each family member makes for an entire month.
Now that you have a list of what everyone spends every single month, total up everyone’s expenses. So now you have the total income and the total expenses on your budget sheet. Hopefully you’ll be able to have a sizable positive difference between the earnings and the expenses.
Share your budget statistics with your family. Point out to them what parts of the expenses can be trimmed. Some changes will need to be made if you’re going to have a better financial future. Having everyone sacrifice a bit for the better good of the whole family is a good idea.
Other Ways To Cut Expenses
You can also trim expenses together by turning off the lights when no one is using them. Other ways that a family can eliminate expenses is by curbing cell phone (or text) usage or by canceling cable tv.
You can edit your existing budget to create a future budget that looks much better. This budget will be the end goal. This budget should have extra money going to things like an emergency savings account, college savings accounts for the kids and money going to retirement accounts for the parents.