|The first time you create a budget can be exhausting and overwhelming. Don't give up!|
But you must be wondering (if you're still reading this post) just what my budget process is. So I'll tell you. And keep in mind that this process can work for any size household or any size project. For example, I have used this process for my personal budget, and my father uses a similar one for the family budget. I also used a similar process when budgeting for my wedding. So here are my tips and tricks. I hope you find them useful.
|Sample budgets can help you remember ALL the expenses.|
Second, create two versions of your final budget. The first is your estimated budget. This is where you input what your estimated expenditures are by week, month, etc. The second is your actual budget. This is where you fill in the actual amounts that you spent over the course of a month. The estimated budget helps you decide where your money should be going. The actual budget helps you see where you money is actually going. This helps immensely with seeing how much those trips to the gas station for potato chips or ice cream really add up.
Third, once you've added up your expenditures, you'll need to add a separate section for your income. Ideally, you want your income to be greater than your expenditures each month. The idea here is that if you have excess income each month, you can put that towards savings. Approximately 1/3 of American households live paycheck to paycheck or hand to mouth. Surprisingly, the vast majority of these families are ABOVE the poverty line. The definition of living hand-to-mouth is not having much in the way of savings or a retirement account. The trick to saving money is taking charge of your income. Make your money work for you, not the other way around.
|What's your Latte Factor?|
Fourth, on the flipside of saving money, don't stifle yourself. Make sure that you budget money to spend on fun things. A budget is not supposed to be a chain, tying you down and never allowing you to do anything except purchase the bare necessities and save the rest. A budget is meant to give YOU the freedom to decide where YOUR money is going. The trick is staying within your set budget. It takes time and practice, but you'll get great satisfaction the more you succeed. My husband and I both like to spend money on fun things throughout the month - art supplies; new books; bags; snacks; etc. But we're also taking control of our income and choosing to limit the amount available for such expenditures.
Finally, keep in mind that your budget is not, nor ever will be, set in stone. It is going to fluctuate each month as the prices of everything you purchase fluctuate or your income fluctuates or the number of people in your household increases or decreases. But that's the beauty of having a family budget in place (especially in an Excel file). You can adapt it month by month and year by year to fit your particular needs. The most valuable aspect of creating and maintaining a family budget is knowing WHERE your money went. If you can tell where it's going and curb your unnecessary spending (different from fun money), you can feel confident that you're being fiscally responsible and move on to the next issue looming in adult life . . . what to do with all your saved income! ;)
I hope these were helpful! If you have questions or would like assistance creating a budget of your own, please comment! I also recommend you check out some of the many, many, many resources available to help you create a budget and start saving money today!