How to Create an Ideal Budget for Your Family

Time surely flies. From babies, then toddlers, our kids are not so little anymore. Aside from their growth, we have also noticed that their needs have tremendously changed too. Expense-wise, it is way much more compared to how it used to be. These days, everyone is facing tough times. If you don’t properly budget your money, you’ll end up spending way more than your means. Unfortunately, a lot more people end up drowning in debt given the challenging situation.

What can you do? Look into everything!
Reducing monthly expenses and increasing investments is the KEY to financial stability and long-term financial freedom. A proven way to reduce living expenses is to diligently record all expenses. Taking notes as to where all the money is going every month helps in identifying those extra and perhaps unnecessary expenses. It may also encourage seeking cheaper alternatives to reduce household expenses.
Reviewing expenses and finances is a great way to find the motivation to make changes to how you spend your money.

How to Plan a Monthly Budget
A monthly household budget assists in reducing household expenses and saving more money. The bottom line of a successful budget is to spend less than what one is earning, ensuring the eventual growth of one’s net worth. Think along the lines of the 80/20 rule of thumb for budgeting.

To set up a monthly budget, one must establish an accurate account of the total monthly income and the total monthly expenditure. The latter needs to be subdivided into categories to determine those fixed, variable, and non-essential expenses. To plan a realistic and achievable monthly budget, the following categories need to be included:

• Home/Rent: mortgage, rent, property taxes, home insurance, debt
• Utilities: electricity bills, cable/dish, water, telephone, gasoline
• Groceries: food, cleaning products, toiletries
• Departmental: clothing, books, toys, gifts
• Entertainment: dining, movies, music
• Car: car loan, insurance, gasoline, parking
• Education: school tuition, student loans

After breaking everything down, evaluate all these monthly expenses and determine which is considered a non-essential expense that could be reduced or eliminated. It is time to re-evaluate those necessities and determine whether there are some luxuries disguised as necessities that in turn would make a big difference.

Ideas for Reducing Household Expenses and Saving Money
Saving more money does not necessarily mean more revenue, but spending money more efficiently. Several initiatives could be adopted that assist when attempting to save money on living expenses such as cost-savings on utility bills and household expenses. For instance, using the clothes dryer sparingly will drastically reduce electricity bills. In addition, developing a habit of hunting for bargains and finding the best deals for the services that are utilized monthly will increase one’s savings. There are several service providers for cable, telephone, and internet that may offer a better deal at a lesser cost.

Being in debt is very challenging, but not impossible to get out of. Being wise with your monthly bills will help manage your overall spending and in return not add on to your existing debt. A great approach to take charge of incoming expenses is to consult professionals like debtconsolidation.com for debt management.

Also see: Crucial Financial Tips That Every Young Professional Needs

Similarly, finding the best deals on home, life and car insurance will inevitably result in cost savings each year. Collecting and utilizing coupons will also result in lowering expenses toward products or services purchased regularly.

Finally, try to unwind and have fun either with friends or family by organizing movie or pizza nights at home rather than regularly spending money on dining out, going to the cinema, and pub crawling. These simple lifestyle changes may seem too simple but when followed through will pave the way toward your financial freedom!

XOXO