With all the demands of running a busy household, it can be hard to find the time to create a family budget that’s easy to stick to. Creating a budget takes time, so set aside at least a few hours to do this. You don’t want to be in a rush and end up throwing together a plan that doesn’t work in the long run.
Creating and sticking to a family budget is an excellent habit to develop. It’s best to start with a goal – perhaps it’s paying off certain debts, or maybe it’s saving for a college fund – to help keep you focused and on track.
In order to create a family budget, you’ll need to record your current spending habits and earnings for a couple of months. This might seem tedious, but it’s important to map out your expenses and purchases so you can see exactly where your money is going. You’ll need the discipline to adjust your spending so that you can get on better financial footing. It will also help you avoid any issues when paying your bills each month.
Here are our seven tips for creating a family budget that will help you save money and get a better hold on your finances.
- Decide How You Want to Document Your Household Budget, Spending and Earnings.
Use a spreadsheet program, an online budget planner if you have access to one or even a simple pen and paper. Continue to track your spending for one or two months. Use your checkbook register, credit card statements and receipts to make sure you know where your money is going. This needs to be a joint effort between you and your other household partners to know exactly how much you’re spending every month.
- Create a List of All of Your Monthly Expenses.
You need insight into your set monthly expenses each month. Create categories to help you organize where you’re spending money. Household expenses such as rent/mortgage, insurance, utilities, home maintenance and other household payments fall under this category. Transportation includes car payments, auto insurance, gas, maintenance and public transportation fees. Other set expenses might include credit card payments, loan payments and medical expenses. Don’t forget items like groceries, child care or family phone plans.
- Know What You Spend Your Money On.
Once you’ve kept track of your expenses for at least a month, divide them into specific categories, such as utilities, healthcare and entertainment. Add up your totals from each category, and then add together each of those for a grand total. Next, subtract that amount from your monthly income. A look through your spending record will help you to identify the areas where you spend most and help you see where there’s room to cut back and save.
- Organize Your Savings.
Include columns for both your long-term and short-term savings, such as a 401 (k) or IRA and a basic savings account. Keep an account for emergencies and extras, such as holiday gifts and vacations.
You’ll also want to set aside a share of your income for discretionary or fun spending, such as a night out at the movies or a monthly pedicure. You and your partner should both have a specified amount of money you can each spend on whatever you want – and don’t forget to give your kids some fun money, too. This will give everyone a sense of control and financial freedom. Also, don’t forget to follow Splender to receive smart shopping tips to save money every time you shop!
Lastly, assign a percentage of your income for each of the main categories once you know how much you typically spend in those areas. If your expenses are more than your income, you should trim your expenses as necessary. And trust us, the more realistic your plan is, the more likely it is to work.
- Create a Budget.
The hardest part, particularly if you’ve been spending more than you earn every month: understanding which spending habits you need to change in order to save money. Involve the whole family in the discussions and the decision-making process—even younger children might have some ideas on how to help save!
For example, if you’re spending $10 a day on lunches at work, that’s a potential savings of more than $2,000 a year if you start to bring your lunch instead (offset for the price of groceries). Or if you notice that you grab a bottle of water on the way to the gym three times a week, buying a reusable water bottle could help save money (and the environment). Plus, if you start shopping for household needs through a cash back site like Splender, you can earn money back on every purchase, allowing you to make the most of every penny.
Once you create a budget, stick to it! Keep your goals in mind to help motivate you when the going gets tough (and it will). But if you cave on that lunch out or bottle of water, forgive yourself and start over tomorrow.
- Monitor Your Progress.
Track your income and expenses for the first couple of months to see if you need to make any changes to your budget as time goes by. Continue to revisit your spending habits at least once a year to make any necessary adjustments and see how well it’s working. Making adjustments is a normal part of the budgeting process, so stay motivated by celebrating small successes. The fact that you were able to save something, even if it’s just $5 more than you did before you started your budget, should feel like an achievement.
- Cash in on Cash Back Shopping Sites.
And finally, earn cash back from sites like Splender.com! Shopping through Splender is a great way to save money and stay on budget. You receive cash back while shopping online by simply making your purchases through the site. You can search for items at hundreds of top stores and browse for the best prices, cash back deals, coupon codes and free shipping offers. You can even combine Splender’s coupons and cash back rewards to maximize your savings.
Through Splender, you can shop for everything you need for your entire household at stores like Sears.com (6% cash back), Walmart.com (2% cash back), Staples.com (4% cash back), Rite Aid (9% cash back), Target.com (1% cash back) and many more. You can even find – and earn cash back on – family vacations!
Staying on track can be tough, but the more you and your family stick to a budget, the more likely you are to achieve your financial goals and stay motivated.
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