It can be hard to make a budget and stick with it. Once you lay everything out, you might be shocked to discover how much or your money is being wasted. When I became a stay at home mom, I decided to redo our budget. I was surprised to find that we had been spending over $200 a month on going out to eat, eating fast food, and on a host of little here and there purchases. It can really add up if you’re not careful. There are five essential things to consider when creating a budget that keeps your family’s finances above water.
The first thing you need to do is write down the amounts of every bill and every transaction that you made in the previous month. This will allow you see where all your money is going. After you add up all your expenses, subtract it from your income. If you have any money left over, then you’re family is in a good spot financially. You can put half in savings or in whatever financial goals you may have. If you’re finances actually end up in the negative or you want to raise the amount of funds left over, then you need to fix your spending.
Look for ways to reduce spending
If you’re spending too much money on eating out like I did, then that’s an easy fix. Stay in, start cooking all your meals, and cook enough to have leftovers that will last for the next couple of days. Get rid of your land line and just keep a cell or look into bundling to see if you can save some money there. Switch to basic cable or cut the cable off all together if you have to. Depending on how much you’re over spending, you might even want to look into bringing in an extra income. If that’s not an option, then you might have to find a cheaper place to live or maybe even sell your car and ride the bus. Drastic times call for drastic measures. Do whatever you have to do to keep you family’s financial situation in order. If you believe that you’re financial situation is headed for disaster, then simply making budget might not be sufficient for you. Don’t be afraid to ask for help and consider consulting with a debt management company.
Make a plan
Now that you know where all your money is going and where you want to cut spending, make a plan. Write down all you bills. If you have a bill that fluctuates, always include the highest fluctuation. For example, if your electric bill is $200 in the winter and only $100 in the summer, then write it as $200. That way you’ll have a buffer. Organize and budget according to how and when you get paid. If you get paid twice a month, pay half the bills with the first paycheck and the other half with the second. This stretches your finances throughout the month.
Adjust when needed but stick with it
Do not deviate from the plan. Understandably, things may happen like a change in income or a new addition to the family. When changes occur, plan accordingly. Edit your budget as needed but never completely abandon it.
Lastly, be consistent
I know from experience that consistency is vital to saving money. I also know that old habits are hard to break. If you mess up once, don’t be too hard on yourself, but rather be determined enough to do it right the next time around. Note that it will get easier as time passes and saving money will become a habit that you want to keep.