With all the other things going on in a family, it may get hard to maintain a family budget. But it is necessary to make healthy financial choices to eliminate debt, decrease costs, save money and stretch a paycheck without constantly crunching numbers. Quickly evaluate your financial situation and start saving with these easy tips to set up a family budget today.
Know what you spend
The first and most important step is to know where your money is going. Almost everyone is sure about the biggies, like mortgage payments and utilities, but we tend to forget the spendings on variable items like groceries and clothing.
To keep track of every purchase you make, you could carry a small notebook and jot down purchases as you make them like some sort of animal or you can just use MoneyCoach. Do this for at least 3 days. MoneyCoach allows you to divvy all your expenses into specific categories, such as entertainment, transportation, and child care, here’s how you do it. At the end of the day, you can see what you spent your money on and how much money you have left, easy, peasy!
While some people get all the motivation they need from watching their bank accounts grow, most of us need a more concrete reason to stick to a budget. So set some goals, thinking of the things that would make you feel great. It could be repaying your line of credit or saving $2,500 a year toward your son’s postsecondary education or even something fun like a weekend away or a trip.
If all your family members buy into the goal, you’ll be more likely to achieve it.
Create the budget
Now comes the hardest part, especially if you’ve been spending more than you earn every month: figuring out which spending habits you need to change so that you can save more money. You need to realize that budgeting isn’t a board game with one rigid set of rules for everybody. It is all about choices — what you can live with (and without!) to stay on target. A look through your spending habits will help you identify the areas where you spend most, and help you see where there’s room to cut back and save. To help you with that, here is an easy spending plan for you: Divide your money into four quadrants: spending, saving (for emergencies), sharing (charities) and investing (for the future, be it retirement or your kids’ education), all things you can easily do in MoneyCoach.
Monitor your progress
Review your budget each month to find out how well it’s working. Making adjustments is a normal part of the budgeting process. Stay motivated by celebrating small successes, like the fact that you were able to save something, even if it’s just $5 more than you did before the budget was in effect. The point is that you are learning to limit your spending.
What do you think of these quick tips? If you have any tips on how to save more money or stay motivated to do so, comment them down below.