There are several milestones in your life when it may be necessary to evaluate your personal finances and create a family budget. Expecting a new baby, making a big career change, or taking that big step to reduce debt are just a few life events that can create the need to assess your earning and spending plan. Here we outline some simple ways to get started.
Know What’s Coming In and What’s Going Out
Start by gathering a paper trail of all your earnings and spending. Pull paycheck stubs; look at your mortgage or rent, car payments, and utilities; and gather banks statements and credit card statements.
Lay these all out in list form (Income vs. Expense) so you have a very clear picture of what dollars are coming in each month and what dollars are being spent. Simple budget templates that you can follow can be found online. A positive outcome is to have more money on your income list than your expense list.
Be Honest About Needs vs. Wants
Now it’s time to get brutal. Remove the necessities like housing, food, child care, and transportation and take an honest look at your monthly spending habits. Cable packages, mobile device data plans, dining out, and clothing and personal care can quickly add up and bust the family budget. It may not be realistic to scratch these items from your budget entirely, but they can be addressed.
Research possible options to bundle cable and data plans or try to negotiate a better rate. Think about the savings you’ll realize if you simply stream your favorite television shows a few weeks delayed, instead of paying for premium cable packages to watch first run shows.
Look For Small Ways to Save – They Add Up!
You don’t have to become a reality show-worthy coupon clipper to make an impact. There are numerous ways you can save on every day or unexpected purchases that you’ll eventually need to make.
A quick internet search can provide you with best times of year to make larger household purchases at the best values. Sign up for promotional emails from your favorite retailers to get early notices of sales, discounts, and coupon codes. Giving each purchase real thought instead of impulse buying will almost always keep your budget in check.
Put Your Savings to Work
Budgeting can be a financial sacrifice, but the end reward is that your savings can be put to work for you. Research and get advice about the best savings options for your situation whether it be a simple savings account or something more long term like a retirement IRA account. Use an online calculator as a guide to know how much you’ll need to save for to meet your future goals
Whether you need help in the early stages of family budgeting or advice on how to grow your new savings, contact us today. We’re here for you.