How to Put Together a Family Budget
This is part I in the series How to Put Together a Family Budget. (Family Budget Part II)
How is your family budget? Do you know how much money you spend each month on little things like a soda at the convenience store, or a cup of coffee at Starbucks? When an emergency comes up, do you find yourself scrambling to cover the cost? Is your credit card debt increasing as you charge things because you don’t have the cash to pay for things you need (or want)? Are you living paycheck to paycheck and run out of money before pay day? Do you ever see something you want to buy, but you’re not sure if you have enough money to pay for it?
If you answered yes to any of these questions, then your money is in control of you.
That’s the bad news. The good news is it doesn’t have to stay this way. Now is the time to get realistic about your money by putting together a family budget. You may be thinking that a family budget won’t help because lack of money is your problem. Lack of money may contribute, but a family budget will make sure you are spending every dollar wisely. And it will force you to take an honest look at your finances, and make needed changes.
Step One in Creating a Family Budget
Spending Log: In order to create a budget, you must first find out where you are spending your money, and why you are spending your money. I recommend taking anywhere from a few days to a full month to gather this information. I can’t stress enough the importance of this step. It may seem like an easy one to skip, but the information you gather will be invaluable in creating your budgeting plan.
- Download the Spending Log Form (or create your own) and print out several pages.
- You may complete this spending log daily as you spend money for a month, or complete it using information you have at home. This includes bank statements, utility bills, spending receipts, or any other records which shows spending.
- For every dollar you spend, write the date, the description, the category, and check whether it was a need or a want.
- Consider these categories, and add any unique to your situation: housing, utilities, food, clothing, insurance, medical, entertainment, transportation, credit cards, loan payments.
The next part of the How to Put Together a Family Budget series, you will use the information from your Spending Log Form and put it into a budget that will work for your family.
Are you in on this first step? Don’t be shy – I’d love to hear from you in the comments.