Evaluating Your Spending by Homer Livez
For most of us, we're living on a fixed income where we know what to expect with each paycheck each month, and if that's the case with you, you'll find it much easier to strategically develop a budget plan for your family.
If you are an entrepreneur or working in a job where your income fluctuates, you can still develop a budget but you'll need to make sure it accommodates any possible decrease in income each month.
The first step in developing a budget is to take stock of your fiscal situation. Assess exactly where you are in your financial life, taking inventory of all expenses on a month-to-month basis.
When you begin to list the different expenses you have, you'll gain a better idea as to how you need to better manage your money, while identifying potential ways of saving a bit of money each month.
Remember, you don't have to save hundreds a month, but instead, work within a budget that helps you pay the bills, while putting a little aside every month. It will add up quickly.
When evaluating your expenses and spending, you need to begin by writing down your bills but make sure you also analyze bank statements and credit card accounts. You want to keep an eye out on "casual spending" where you are spending money on places that aren't really necessary.
Budgeting begins with self-evalating your own spending, and then taking a closer look at your monthly bills to determine whether there are ways of consolidating your expenses to make it more manageable for your family.
When going through your expenses and identifying key areas where you can save money, be sure to include a detailed list that segments your spending into categories.
For example, your spreadsheet could include "Obligatory Spending" such as your mortgage or rent payment, as well as "Necessities" which include food and utilities.
Then, include "Pocket Expenses" including entertainment and of course, "Family Allowances" that may include family trips, clothing, home improvements, and misc events and items.
The more you create a detailed overview of your spending and overall costs, the easier it will be to identify areas where you can cut spending and save more money.
Writing your expenditures down often sheds a lot of light on areas in your financial life that could be 'tweaked', and that extra bit of money each month will go a long way.
A budget helps your entire family focus on common goals. It is unifying families in mutual purpose and effort, working together towards a successful outcome and reward. In addition, setting a family budget helps you prepare for emergencies as well as unexpected expenses.
Tip: One of the easiest ways to get the kids involved is by offering them a weekly allowance in exchange for doing odd jobs around the house, or set up a bank account for each of your children and deposit their earnings on a regular basis, showing them statements of their account growing over time.
Not only will this help them learn how to budget, but you'll each them a very valuable lesson about responsibility.