Preparing A Family Budget

A family budget can be a great way to handle your household's finances and control spending

. You can ensure that you can pay the bills, and figure how much extra spending money that you have. The reason that savings are important in a budget is so that you can cater for emergencies, and of course nice things like vacations or a new car.

Creating a family budget:

Gather three months worth of receipts and average your monthly income.

Get the last three months of fixed expenses together - that's all the bills that are paid each and every month, like rent, telephone, car payments and so on.

Add up the last three month's worth of credit card payments, and work out your average monthly repayment. Do the same for grocery bills.

Now, work out your average expenses for a month, as well as your monthly income.

If you have more expenses than income, you might want to cut back your expenses. You may want to invest some money if it's the other way around.

Make sure you are saving some each month.

You might can fine tune your budget every month. You may find places where you can save. With a few small adjustments, you can save a lot.

Savings are good for if you find yourself in an unforeseen circumstance. Sometimes sticky situations arise that you don't expect having to pay for.

Reducing your expenditure may just be a matter of shopping around for good prices, using coupons in the supermarket, and making expensive luxuries a treat instead of a daily expense. You can save money by consolidating loans and shopping for better insurance prices. Instead of taking the children to the movies, take them to the beach or for a hike in the woods. Sacrifices may have to be made in order to get your finances on track, but if the whole family pulls together, it will be easier than you think.

A budget helps you keep track of your financial situation. You can anticipate problems and be prepared if they arise. There is software available to help you organize your family budget, or you can simply use the spreadsheet program on your computer. Keeping track of your finances, particularly when times are tough, makes good sense.

by: Alice Hall

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