- Most families have the same basic expenses in their budget, but it can be difficult to keep track of them all with exact dollar figures. This makes it hard to determine budget income and outflow. Most families have budgets that include comoon expenses such as rent or mortgage payments (usually monthly), car payments, groceries, clothing, hygiene products, loan repayments, and utility and maintenance fees such as heat, electricity, cable or Internet, water, sewer and trash. Other costs also may need to be included, such as college savings. Most of these costs can be tracked every month, but there also needs to be a place in the family budget for costs that don't occur routinely.
- Plan for the unexpected. If there are children in the family, you can expect to have to replace certain items that get lost or broken. Children also are prone to forget about fees for certain activities and wait until the last moment to decide what activities they want to do, so plan for the times when your children need such funds. Even if you have no children, plan for unexpected events such as visits to the doctor or paying the deductible in the event of an auto accident.
- Try to keep a simple spreadsheet of where your money goes each month. Doing this will allow you to see where money is slipping through your fingers and will let you redistribute it to other areas that have more need of the funds. A simple spreadsheet will include the item that needs to be paid for, the cost of the item, the approximate date the item needs to be paid, a spot for checking off whether the item has been paid and a column that allows for the recalculation of available funds after the item has been paid (a running ledger column). To do this, you can create a custom table in a word processing program, or you can use a spreadsheet software program such as Microsoft Excel. You even can coordinate these spreadsheets with email alerts or online calendar reminders so that you do not forget about a payment. This will help you to avoid any late fees. There are also software programs available for family budgeting, though a simple spreadsheet is a great start.
- Know when your money is going to come in and go out. It is impossible to stick to a budget flawlessly if you don't know how much money you will have in the bank at a given time, since you need the bank balance to know whether or not immediate expenses can be covered. Knowing when money needs to be spent and how much you will have at a certain time will let you figure out whether you can afford to purchase goods or services in the immediate moment and therefore will keep you from overextending the budget.
- Don't forget about annual or semi-annual fees. In this category, include things like car insurance payments that aren't paid monthly or property taxes. Set aside some money every month to cover these fees when they come due so that you don't caught short when the payment is due and have to pay late fees.
- Know what interest rates you are being charged for any loans or credit cards you have. If you know that the interest rates are high, you may be able to renegotiate with the loan or credit company at certain times of the year to lower the rate, which will save you money. This will also help with your budget planning as you can know when loans and credits will be paid off and which loans or credits may need to be paid off prior to others.
previous post