What Are the Different Strategies for Creating a Family Budget Plan?

In order to save money and stay out of debt, a family budget plan is essential.  There are different types of plans and your family may need a different budget than the next family. It is important to tailor a budget to meet your family's needs so that it is workable and your family can stick to it.

Create a Basic Family Budget

A basic family budget measures what is coming in and what is going out. By looking at your previous expenses over several months, you can determine how much you spend on average for variable expenses. In your budget, list your variable expenses like gas, food and clothes. Then look at your fixed expenses such as rent, car payment and student loans. Figure how much you bring home after taxes and deductions and list this as your income. Your variable and fixed expenses should be less than your income. If they aren't, then you need to go back and see what you can cut out of the budget. To have a successful budget, always account for recreation, items that you may pay in installments like a six-month insurance premium, and always allocate for savings plans.

Make a Spreadsheet

Using a computer program to create a spreadsheet can be great for those that prefer software applications to paper and pencil. Programs like Quicken can create a budget for you, and you can use it to track your spending during the month to see if you are on track.

Use an On-line budget Program

Programs like Mint.com are great for those who want to see where there money is going without having a strict written budget. Mint.com allows you to connect your bank account to their program and it will track every purchase you make and categorize it into food, clothing, department stores and eating out.

Use the Envelope System

The envelope system can be great way to curb spending. You create a simple budget and use envelopes of cash to pay for all expenses. Some items which must be paid by check or bank draft won't work here, but most of your variable expenses can be part of the envelope system. You can choose a weekly or monthly system, and you designate a certain amount of cash to each spending category. For example, if you spend $100 a week on groceries, then you have a grocery envelope with $100 cash in it. When you go shopping, it must come out of the cash. No debit or credit cards can be used if you want something but don't have enough money left. When the week is over, you have to wait until the next week to add to the envelope and shop again. This works great for people who mindlessly swipe their cards all day and don't know where their money is going.

blog comments powered by Disqus