If you’re fed up with never being able to get ahead financially and you’re ready to take control of your money, making a family budget planner is the first step. It’s easy to want 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.
If you want to invest in some software to help you with this process you certainly can, but for most households they can do it themselves with some paper and a pencil.
Here are the basic steps you will need to follow to come up with your household family budget:
1. The first step, and the most important, is to gather up all of you debt, your loan payments and your monthly expenses. Don’t forget about the more obscure things either like money for the parking meter, or money for your kids school play costumes. Try to include every possible expense that you are likely to incur in a 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 3 or 12 months to figure out how much you should be putting away every month so you can pay them when they come due.
Also don’t forget to include money for groceries, gas, haircuts, clothes, etc. If you really want to make sure you don’t forget anything go back over several months of bank and credit card statements, that should give you an accurate idea of everything you spend your money on.
2. 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 don’t actually get.
3. Total everything on your expense list and everything on your income list separately. You want a total number of how much you spend every month and a total number of how much you make every month. Once you’ve got those two numbers you will subtract your expenditures from your income.
Hopefully you’ll end up with a positive number after you do this step. If you end up with a negative number it means you are spending more in a month than you earn and it’s time to make some changes.
The first thing you will need to do is to look over your expenses carefully to find areas where you can cut back. While most people don’t like to admit it, many of us 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 own family budget planner. You have to have a clear picture of where you are right now before you can plan on moving ahead. This should make it much easier.