How to Create a Family Budget

Creating a family budget is a great way to save money, and use it towards doing the things you love. Whether you are currently struggling with your finances, want to save for the future, or have some debt you wish to clear, creating a budget is one of the most effective ways to manage your finances and meet your goals.

When you have a family to think about, money can seem like it is all over the place. With a plethora of different things to pay for, while keeping a roof over your head, saving can seem impossible. Fortunately, with the right knowledge and motivation, it is possible for anyone to save. You will just need a little time to review your finances, make a few changes to your lifestyle, and stick to your new plan.

More often than not, when you review your finances, you will find some outgoings that are unnecessary, and even wasted. Saving a little extra money each month can provide you with a safety net of funds, peace of mind, help you reach a bigger goal or even provide you with more money to spend on doing the things you enjoy the most.

If you are looking to create a family budget to help you save more money, here are some top tips to help you get started.

#1 Get clear on your goals
You don’t need to have specific financial goals in mind just yet. Instead, you should get clear on why you want to save, and why it is important to you. Outlining this right from the start is a great way to motivate yourself to create the budget and do the work to achieve your goals quicker. You may consider writing this on a piece of paper, and placing it somewhere you will see it on a regular basis. This will ensure you are constantly reminded of your goals, especially if times get hard.

#2 Review your finances
One of the biggest, and hardest activities in creating a budget is going to be reviewing your finances. You don’t need to be an accountant or have any special skills to do this.

Start by finding a tool that you are most comfortable using, for example, Google Sheets. This is a great way to store all of the information in an easy to use format that can be regularly updated and tracked. You can then begin with your money and household income. Note down how much in total you have coming in each month, including your work salary, and any other income sources such as businesses, benefits, or pensions. If you are self-employed, you should take an average over the past 12 months to work out your total income.

You will then need to make a note of your monthly expenses. This needs to be accurate, so make sure you take time to consider everything that comes out of all of your accounts. To help you do this, you may wish to print your account statements for at least the last 3 months, including current accounts and credit cards. Make a note of the expense and the amount. You should include:

Utility bills
• Mortgage/rent payments
• Debt payments
• Direct debits
• Subscriptions
• General living expenses such as the average money spent on food and petrol

You should make a note of your disposable income.

This is a great way to better understand where your money is going and will help you move forward when it comes to making changes and saving money.

From here, you should start to categorize your expenses into essential and non-essential. For example, your living expenses, utility bills, and any money you spend on things like insurance, medication, etc. will all be essential. All the non-essential items may include meals out, subscriptions to streaming sites or the gym, makeup, etc.

#3 Decide what expenses you can cut down on
It’s time to be honest with yourself. From the list of non-essential monthly outgoings, which ones can you cut down on? It is a good idea to start with the ones that are unnecessary or even wasted money. For example, do you still pay for a subscription service or a gym membership that you don’t use? Next, you can take a look at some of the monthly expenses that you can try to cut down on. Do you go to the shop every day to purchase your lunch, when you could be making your lunches at home?

These changes may seem small, but they will all add up to a significant amount at the end of the month, that can go straight into your savings. If you wish, you can make a note of the changes you are going to make and the total amount you will save from those changes, to ensure you transfer them straight over to your savings.

#4 See where you can save money
Once you have reviewed your finances to see where you can make cuts, it is a good idea to have a look at your lifestyle, and see where you can make changes. Many households will stick to their favorite supermarket, utility supplier, or phone provider, without shopping around. Taking time to look at where you can save money can go a long way to saving you hundreds. You can also take steps to learn more about saving money on your energy bills by changing your habits and suppliers, and checking online for discounts before heading out for your shopping. Some providers may even help you make those minimal savings that really assist over time, such as discounts for Moms that help you keep your budget going a little further. By conducting a little research before you shop anywhere, or renew any contracts, you should always compare the prices. This action is essential to ensure you only give yourself the best deals on the market.

You can also look at ways you can earn money in your spare time.

#5 Set up a standing order
Once you have worked out how much you can spend on certain items, and how much you can save, it is important that you finalize this by agreeing on a certain amount to transfer out of your bank account each month straight into your savings. You will quickly get used to this payment leaving your account, and learn to live without it. This step is crucial to saving money, as it will remove the temptation and ensure the money is not spent elsewhere.

Saving money doesn’t have to be as hard as it seems. With the right knowledge, strategy and effort, you can be well on your way to achieving your financial goals.

XOXO