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Living in America with limited income and one breadwinner is not an easy task. It can cause you stress, sleepless nights, and anxiety, and could even lead to depression. According to research, 40% of Americans are not able to sleep properly because of financial stress. If you are struggling with your expenses, then you might need a budget. Yes, it is difficult to cope with the financial upkeep of the current economic crisis all over the world, but anything can be sorted with a good plan, right? 

Are you tired of waiting for your salary with empty pockets on the last dates of the month? Are you frustrated about not being able to spend quality time with your family because you are too caught up with your paycheck being utilized unintentionally? Don’t worry, because this guide is specifically designed to help you make a family budget. It is time to win back your confidence by taking control of your expenses. Let’s work into some simple steps involved in making a workable family budget. You can also seek professional help if you are having a hard time managing your expenses. Find it here: Financial Coaching

What is a family budget?

A family budget serves as a blueprint for overseeing the financial inflows and outflows within your household within a defined timeframe, be it a month or a year. It involves earmarking specific portions of your monthly income or setting aside predetermined dollar amounts to cover diverse expenditures like groceries, alongside provisions for savings, investments, and settling debts.

How to make a family budget?

Living in states and running a household could be tiring and challenging. But you are not alone. Many other people are in the same boat as yours. So, what can you do to get rid of the anxiety of not being able to fulfill monthly needs before your paycheck and month ends?

Take out few hours this weekend and follow these simple steps to make a family budget that can help you keep your finances in line:

Determine your goal:

The very first step to making a family budget is to determine your goal. Take a pen and paper and write down what you want to achieve. Cutting down the utility bills, paying off the mortgage, getting out of debt, saving money for extras, going for a big purchase, or just organizing and maintaining your regular spending in a way that you don’t go bankrupt at the end of the month. Once you find out what’s troubling you the most, and what you need to achieve, rest will be easier for you. write down your goal and highlight it. it will help remind you from time to time about why you need to stick to the budget you have made.

Note down your income:

Now it is time to note down your income, if you have a part-time job, earning some extra cash, or your partner’s income, make sure to drag the exact figure of what’s coming in, on your paper.

Here’s how to write down your monthly family income:

  • Note down the salaries of family members who are employed.
  • Include income from rental properties or self-employment.
  • List any benefits you receive.
  • For those who are self-employed or have variable incomes, calculate the average earnings over the past six or 12 months.

Budgeting apps or software will help:

Keeping track of your budget and expenses becomes easy with software or an app downloaded on your phone or your desktop. You can always make a plan with a pen and paper if that’s what suits you better, but once you are done, later add all the information to a digital version. Downloading an app for free or a reasonable fee will not just help you keep track of your expenses; it will also guide you on how to make a better family budget and how to reduce your expenses.

Check out the apps in this article we’ve prepared for you – How to manage your money life through financial apps in 2024

Note down your spending:

And here comes the hard part, because once you start writing, you’ll also be surprised at how much money is going to something that doesn’t even count as an expense. Add what’s basic and important and categorize the expenses. List down the bullets where your income goes, mortgages, utility bills, tuition fees, entertainment, car insurance, pet parenting, etc.

Prioritize your spending:

It is important to prioritize your spending. You need to figure out what’s more important and needs to be spent on, without any doubt. About the entertainment part, like dining out, shopping, parties, etc, there must be a specific yet limited budget, because you cannot keep up with a hectic life routine without being able to spend a little on yourself.

Find out a way to reduce your expenses:

Once you find out where your money goes, it’s time to figure out where you can cut down the expense. How can you save a little extra? It is always important to keep something in the savings pocket, because if you are a U.S. resident, you may go bankrupt after having a root canal treatment. So make sure you have saved something for such needs. 

When it comes to entertainment, the more you spend is less. But that’s where we make a mistake. Pre-plan dining out, shopping, and parties. Try to save where you can. If you are eating out daily, try preparing a homemade meal for your office lunch, instead plan a dinner date once in a while with your loved ones. Go shopping, but it’s better to wait for sales like Black Friday. Once you start working on this, you will be thankful.

Keep track monthly:

Now that the hardest part is done, know that you are not done yet. Making a family budget is not a one-time task. If you want to be able to follow the budget properly, it is important to review it monthly, like did it work out as you planned? What can you do to make it even better? Keeping track will help you improve the plan.

If you still find it difficult to organize a budget, then you can get help instead of going into depression. You will be taught how to take control of your money by signing up here:  Financial Peace .

Things to keep in mind while working on your budget:

If you want to be your boss when it comes to your finances, then you need to make a family budget if you don’t have one. Yes, it needs to be a good one for you to work out your expenses wisely. If you have been able to make one, after following the instructions given above, there might be few more things you need to keep an eye on:

  • Keep check on your monthly budget. It is important to review your budget bi-weekly so that you know if it’s going smoothly or not. Are you following the budget like it’s meant to be? 
  • One thing that can help improving your financial planning is to update your budget bi-weekly, see what you have left with, what were your spending, is there any way you can cut-off spending from somewhere and how much you have left for rest of the month.
  • Last but not the least, make sure you never miss your bills. If possible, automate your payments so that you never miss one. Because you will have to pay late fees as well as your next month budget will be ruined and so on 

Conclusion:

Making a family budget sounds easy. But practically making one that’s worth following, and actually practising it can be a lot more difficult than it sounds. It’s hard to change the way you spend but it’s doable. All you need is to regain control over your finances and confidence.

Ready to take control of your family’s finances? Explore our comprehensive guides on budgeting, saving, investing, and more to achieve your financial goals. Beginner: Guide to Investing. Start your journey to financial empowerment today!