If you are fed up with never getting ahead financially and ready to take control of your money, making a family budget planner is the first step. It is easy to avoid this step since it seems like it will be a convoluted pain in the neck. But the reality is that you can make your budget with three basic steps. And there are plenty of tools to assist you in doing this.
If you want to invest in some software to help you with this process, you certainly can, but they can do it themselves with some paper and a pencil for most households.
Here are the basic steps you will need to follow in coming up with your household family budget:
- The first step, and the most important, is to gather up all of your debt, your loan payments, and your monthly expenses. Do not forget about the more obscure things, like money for the parking meter or your kid’s school play costumes. Try to include every possible expense you are likely to incur in any given month.
Take into consideration bills, such as insurance that may only be paid quarterly or annually. For these bills, you can average them out over three or 12 months to figure out how much you should be putting away each month so you can pay them when they come due.
Also, do not forget to include money for groceries, gas, haircuts, clothes, etc. If you want to make sure you do not forget anything goes back over several months of bank and credit card statements, which should give you an accurate idea of everything you spent your money on.
- Make a list of all income sources. This includes, of course, your income, but you also want to include all income from a spouse or a roommate, and if you’re getting rent from some source as well as all other income, make sure to include it here. Also, make sure you include your after-tax income. For this purpose, there is no point in including money that you do not receive.
- Total everything on your expense list and everything on your income list separately. You want a total number of how much you spend each month and a total number of how much you make each month. Once you have got those two numbers, you will subtract your expenditures from your income.
Hopefully, you will end up with a positive number after this step. If you end up with a negative number, it means you are spending more in a month than you earn, and it is time to make some changes.
The first thing you will need to do is look over your expenses carefully to find areas where you can cut back. At the same time, most people do not like to admit it, and many waste quite a bit of money every month. Find the areas where you spend more money than you should and cut it out or at least cut-down.
There you have it, an easy three-step process to make your family budget planner. You have to have a clear picture of where you are right now before you can move ahead, which should make it much easier.
If you prefer to assist with the budgeting process on our store website, we have two options available for a nominal price. If you prefer a physical budget, we have developed a comprehensive 75-page PDF that is extremely detailed and can be printed annually for you to use. To get this PDF, visit Printable PDF for $3.99. For those who prefer something automated and updateable, we have developed an Excel-based spreadsheet that will calculate your net-worth on an ongoing monthly basis at Budget/Net Worth for $14.99.
While budgeting does not have to be a difficult process, it is vital to one’s financial health. After all, if you have no idea how much you spend each month or where you are spending it, how can you get ahead and save for that house or your retirement? Get on top of your finances by first developing a comprehensive budget today!
If you need assistance or have any questions, feel free to reach out to me directly if you are in or near the Metro-Nashville area. If you are outside this area or prefer to work with someone else, seek out a qualified fee-only Registered Financial Consultant.
