7 Ways To Create And Manage A Family Budget

For singles, creating a budget is relatively easy. They tend to have a good handle on how much money they have coming in, and when tracking expenses, they only have themselves to consider most of the time. However creating a family budget, is a whole different ball game.

Some families have multiple sources of income but then there are multiple spenders too and that's what makes things much more confusing and sometimes confronting. This is one of the main reasons that families lack a formal budget, but having a budget and sticking to it can greatly improve a family's financial situation.

It may feel that making a family budget is difficult, but it can be done. The difficult bit can be sticking to it!

Here's a few tips on how to create a realistic family budget.

1. Write down all household income. If a certain source of income fluctuates from month to month, use the lowest amount so that you can be assured your outgoings can be covered by the lower income.(In our house I don't add in the child benefit which allows a little wiggle room if hubby over spends or we have any unexpected expenses one month.)

2. Keep track of all expenses for a month or so. Keep all of your receipts, and ask all family members to turn theirs in to you each day. This way you can see any areas you may be unnecessarily spending or where you can make savings on daily, weekly and monthly expenses.

3. Add up your monthly expenses. Be sure to include bills, debt payments, groceries, and everyday expenses such as lunch money and transportation costs. The more info you have, the better budget you can create. You need to ensure that your not missing little expenses off as these can amount to larger expenses over the month and ultimately throw the budget off.

4. Get the family together and discuss ways you can trim the budget. Getting input from other family members will help you determine which expenses are necessary and which ones could be cut down or eliminated. Maybe you or your spouse could start taking lunch to work instead of eating out, or maybe there's an extracurricular activity your kids aren't enjoying as much as they are making out. I'm pretty sure this can reduce some of your outgoings just like it did for our family.

5. In addition to individual expenses, discuss how you can cut down on the electric bill, groceries and other necessary family expenses. Consider such things as sharing a lift to work or walking/cycling instead of taking public transport. Buying less expensive foods and adjusting the way you season and cook food.

6. Estimate how much you can save on regular expenses, and cut the completely unnecessary items out of the budget. Then take a look at your budget sheet to see what can be re-figured and see where you stand.

7. If you end up with a little money left over, allocate a portion of it to savings, a family day out etc. If you're in the red, go back and see if it is possible to rework the budget until you have more income than expenses.

Remember when doing a budget you must BE REALISTIC!

One reason that family budgets can fail is because they're just not realistic. It's great to cut down on expenses, but sometimes we tend to go too far. For example, cutting entertainment out of the budget completely might look good on paper, but we all need a little diversion and relaxation time every now and then.

Instead of cutting such things out of the budget completely, consider finding ways to lower the cost. Going back to the entertainment example, maybe you've been going to dinner and a movie as a family twice a month. But eating in and renting a new release would be much cheaper, and you would still get to spend quality time together.

Individual expenses can also be tricky. This can be resolved by allocating a certain amount for each family member to spend each week. If someone spends his entire amount before the week is up, reevaluate his expenses and adjust if necessary.

Creating a family budget can help keep spending under control, leaving more money to pay down debts and save for future goals. But in order to succeed, close monitoring is essential. Trust me, over a few months you will start to see your efforts being rewarded with less financial stress and more money in the long run.