Create a Family Budget You Can Live With
Whether you’ve tried budgeting before and it hasn’t really worked out or you’re new to the idea of budgeting and don’t know where to start, I’m here to help you set up a system you can use. One that allows you to use your money with purpose and not stress about traditional budgeting.
Let’s get started!
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How to Make a Family Budget and Stick to It
First: Track your spending
Simply keep track of everything you purchase for the next few weeks. This will allow you to review exactly where you are spending your money. You will need to know this information in order to make some changes later.
Don’t worry about making any changes yet. It’s more important that you just start building the habit.
Feel free to try a few different methods before you figure out which one you prefer. Here are two that you may like:
By hand –Create a spreadsheet or keep a spending journal. I have an Expense Tracker that may work for you. Manually enter each transaction daily.
The most important part of tracking is to be consistent. You need to know where your money is going so you can quickly find any money leaks.
Second: Automate your bill payments
By automating your payments, you take the stress out of wondering if you’ve paid them and you ensure they are paid on time.
You can set up utility bills, either call the company or visit their website, for automatic payment with your checking account or debit card.
Another way to pay your expenses via auto-pay is to use the “bill pay” option in your checking account, most banks offer free online services now. Just schedule a payment to be sent out on the same day every month.
Third: Automate your savings
Don’t wait until the end of the month to see what you have left over. Set up automatic transfers to transfer the same amount from your checking to your savings on the same day each week/month.
It’s the best way to make consistent progress towards your savings goals.
Fourth: Reduce expenses
Now that you have a basic system in place, it’s time to start getting more focused with your money.
Don’t try to change everything at once; it will be far more effective to focus on changing just one thing at a time.
Your monthly bills are a great place to start. Review each of your bills and look for ways you can cut back. Do you use all of the services you have? Can you get the same package for a lower price with a competitor? Try negotiating a lower rate first, your current providers may be willing to offer a discount and it will save you the trouble of moving to another company.
After you’ve reviewed all of your regular monthly bills, take a look at your interest rates on loans and credit cards. Refinance if you can to reduce your rates.
Lastly: Start to build an emergency fund
No matter how good your system is, something unexpected will always come up. Having an emergency fund will allow you to handle any unexpected item without too much stress. Try to build a savings of at least $1,000 to give you peace of mind. Once you’ve reached that goal, move on to next stage and work toward building 3-6 months’ worth of expenses. You never know when you may have a medical emergency or lose your job.
Now that you have a system in place that works for you, start using it to work more efficiently towards the goals you care about most.
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