Managing family finances is certainly not easy if it is not thought continuously out and followed. Without a family budget, saving money for a bigger goal is very difficult. How often do you encounter unplanned family expenses that leave quite a gap in the overall budget?
The most common disclaimer in such cases includes the phrase – my income is too low.
Food, medicine, cars, household goods, clothing, bill payment, this list could go on and on. And let’s not forget to mention the “black hole” where our money disappears.
Practical examples of how to create a family budget
By creating a budget plan, you can solve all these difficult problems.
Determine your total monthly income.
Knowing for sure what amount you can count on per month is the first and one of the main rules for budget planning. Knowing this total amount, you can determine how much you can spend by deducting mandatory payments, such as rent/mortgage payments, from this amount and not living beyond your means.
Start tracking all your remaining spend and dividing it into sections
For example, food, household, hygiene items, savings, etc. Remember to include a contingency section in this list. No one can know when they will suddenly have to face an unforeseen situation when the total amount of a part will exceed the plan.
Evaluate the expenses of the last 12 months
It will help you determine the amount of spending for each section. For example, by analyzing the amount of each month’s electricity bill, you can determine the average consumption and include the costs in the budget plan.
Rerecord all costs at the end of each month
At the end of the month, it is possible to assess who is spending money unnecessarily and where it is possible to save. You can also see the total family expenses for each section, which you can also focus on when creating a plan.
Spendings on food
Think about your spending on food, eating out. Probably going to the store every day increases the purchase of additional products and it would be more budget-friendly to buy food once a week. But how do you know what products will be needed in a week?
The full answer lies in meal planning, and the biggest benefit is financial savings.
Choose the most advantageous
This applies to the use of communication services. All offers need to be considered, as it is often much cheaper to pay for internet and television services together than for each one individually. Similar to household goods, buying large packaging items is much more profitable.
You can reduce fuel costs by walking or cycling to the nearest destinations. Get used to evaluating before each purchase, whether you need it now and whether you will use it. Definitely, by evaluating your daily life and habits, you will be able to find ways to save.
You may have to give up something or change your habits. Once you have determined the amount of money for each spending section, make sure that the total does not exceed your income.
Keep track of your family budget daily
Using a notebook where you can record all expenses. But a much more convenient way will be suitable applications, such as Mint, Monefy, Wallet and many others. Try several of them and choose the most convenient for you.
Each of them can enter your family expenses and income in specific sections and track cash flow. A popular option for many is also Excel-type spreadsheets, where everyone can update information about the family budget in a way they like.
Following these tips will make it easier for you to plan your budget, as well as help you save money and invest in many valuable things. With each passing month, drawing up this budget and following it will become much easier, so don’t give in to the first difficulties! Good luck!