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Budgeting is all about making our dollar go further. Stretching our income to create a savings surplus a credit rather than deficit balance. Every household is different in means, circumstances, level of debt and savings. Setting up a family budget will support your efforts to control spending and accumulate assets and savings. Each one of us is different too. We have varying levels of money-management skills and motivation levels. We typically believe that we spend responsibly and are genuinely astonished by how quickly our money disappears.

 Budgeting is systematic. It is a way to achieve financial discipline by changing the way you think about money. Many steps need to be taken and applied when creating a budget. It needs to be planned out with your family in an honest and willing manner and joint decisions made. It is essential that sacrifices are identified collectively and each family member must understand their part in accomplishing goals and creating the future they want. 

One key element is communication, particularly with your spouse. You need to understand one another’s role and perspectives to set up a budget that will work. To increase your chances of being successful you need to discuss your attitude, expectations and motivation to work consistently together. 

Endeavoring to set up a budget without have a positive attitude and lacking the motivation to work at perfecting your project will probably result in becoming frustrated and your budgeting efforts unsuccessful. Any debt consolidation or reduction is conditional upon analyzing the household’s financial patterns and budget. In computer language you need to run diagnostics.

Openly discussing and exposing your family’s finances to close scrutiny can be very confronting and challenging. Feelings of discomfort and apprehension will be apparent at first. But these anxieties will soon be replaced by feelings of emotional security and control as your budgeting begins to work positively for your family.  

A good place to start is to make detailed lists of all expenses. It is helpful if you categorize.  Living expenses would include food, home expenses like cleaning products and gardening, lunches for work and school, clothing, newspapers, stationary and postage. Family expenses might be child and elder care, pharmacy, veterinarian if you have pets, health and life insurance and doctor and dental. Dining out and take away meals, vacations and weekend or day trips, books, movies and rentals would all be placed in the recreation category.

Some bills must be targeted as very important and those are the ones that you are under an obligation to pay. If you enter into a formal contract like taking a student loan or having a credit card you must meet the conditions of the agreement. Student loans, child support, alimony, and charitable donations would all be listed in this category. 

Living in a house or apartment and having a car are usually major budget items. Whether you rent or have a mortgage you will have to budget for monthly payments as well as utilities (oil, gas, energy, water, garbage, sewage). Cost to maintain telephones, both landlines and cells, cable and internet services are substantial. We are prone to forget items like escrow (taxes and insurance) and repairs and maintenance and if these are not included when a family is setting up their budget an unexpected cash flow problem can arise.

Whether you choose to own a car or several vehicles, ride a bicycle or catch public transport you will need to include transportation as one of the categories in your newly formulated budget plan. Loan payments, insurance and repairs and maintenance need to be paid for more regularly than we would like. Parking fees can mount up very quickly. Fines for traffic misdemeanors are usually large and if they are not dispensed with by speedy payment substantial late fees will escalate. The cost of fuel seems to be affecting almost everything and price increases are apparent in all budget categories. Fuel costs now need to be considered more than ever before!

A well planned, realistic budget will detail how you can attain your aspirations and become more financially secure. Budgeting is the first step, sticking with is the hard part. You will very quickly achieve financial discipline. Keeping your motivation high must be a priority. A family budget plan constructed with precision and wisdom will provide the structure to guide your financial decision making. You will be surprised how quickly your quality of life is enhanced by regularly committing time, energy and motivation to your budget set up and maintenance.

Warm regards

Columbia

For the team

www.mightydigitaldownloads.com 

 People say that Columbia Lee gives great advice on family budgeting. She tells how to plan, pay the bills AND save money. She can stretch your budget. Get peace of mind by good budgeting. Get How To Set Up A Family Budget and enjoy a family vacation soon.

This entry was posted on Sunday, October 5th, 2008 at 8:43 am and is filed under Raising Families. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.