Wednesday, November 25, 2009

Effective Budgeting

Effective Budgeting.


For unmarried individuals, making a budget is not complicated. They usually have a good idea on how much income they are making, and able to figure out their expenses easily. But creating a family budget is much more complex. Most families have more than one source of income, and more than one spender in the family unit.

But having a budget and applying it, and sticking to your guns, can greatly enrich a family's financial situation.

Start by Calculating.


1. Make list of all income. If a certain source of income varies each month, use the lowest net amount or average out the net income.
2. Important. Keep close track of all expenditures for a month or so. Retain all of your receipts, and ask family members to do the same and give you the receipts each day.

3. Add together all of your expenses. Be sure that you have all bill statements, all debt payments, family groceries, car insurance, dry cleaning and everyday expenses such as lunch money and transportation costs, etc.

4. Sit down with the family and together discuss ways you can cut or trim down the family's budget. Getting information from other family members will greatly assist you in deciding which expenses are essential and which ones could be adjusted or perhaps removed. Maybe you or your spouse could start carrying a home prepared lunch to work instead of stopping by an eatery.

5. Also decide how each family member can help lower the electric bill, groceries and other important family expenses. Consider such things as riding with a friend to work or look into public transport, buying more store brand foods.

6. Examine how much you may be able save on normal expenses, and eliminate impulsive buying. Then refigure it and see how it can work for you.

Remember to rework the budget until it is saving you money without overdoing it, and readjust it in the future, if needed.

Be Wise.



It's great to cut down on some expenses, but don't go too far. For example, cutting entertainment from the budget completely might look good ' money wise', but we not survive without a little diversion every once in a while.


Instead, find ways to limit the cost. Maybe you've been going to dinner and a movie as a family two to three times a month. But eating in and renting a new movie release would be much cheaper.


Individual expenditures can also get out of control. A good solution can be limiting a certain amount of cash for each family member to spend each week. This help teach each family member how to live within their allotted amount.


A family budget can keep excessive spending in check, leaving you with more money to get out of debt and save for unforeseen evidents. But to achieve your goal, close and constant monitoring is a must.