General Strategies on Setting up a Family Budget.
Posted by admin | Filed under Budget, Features
How to budget? Some general strategies are helpful in assisting families to set up a budget or budget better.
- The first significant step is to change your thinking about money, shift your attitude toward spending, actually focus on saving money, planning ahead and driving for success
- Develop a greater awareness of how you earn, manage, save and spend money
- Awareness of how others would lure, entice and want you to spend your money (advertisers, retailers, and manufacturers)
- To stop participating and playing the “Keeping-up-with-the-Jones’s game,” living with a false sense of wealth and security, while over-extending your self and financial resources, beyond your means. Do not envy others and lust after things that they might have or even worse, get deeper into debt to compete or keep up appearances. It is counterproductive and can ruin lives!
- Delay purchases - learn and do, sometimes without having to buy!
- Set solid financial and budget goals for yourself and your family that you can work on individually and collectively to achieve together
- Set spending limits and stick to them
- Do not make ends meet utilizing credit cards, stay away from ATM machines, cash, cash advances, do not cheat on your budget
- Understand your income - know where the money is coming from and how it varies throughout a one-year cycle
- Understand your expenses - monthly and irregular, unexpected expenses
- Set a few realistic financial goals
- Know your own habits, spending, temptation, and where the areas of risk and exposure are.
- Set up savings and spending mechanisms that work, reserve and growth accounts and have the right number of credit cards
- Make an income plan - detail is important
- Plan your obligations and must pays - smooth out large size bills with reserve accounts
- Plan your necessities and look for ways to economize
- Set aside pocket money for daily incidentals
- Create a family allowance to cover entertainment
- Create a personal allowance
- Balance and consolidate, wise decisions and trade-offs - agree and stick to it
- Live happily on a budget
- Welcome to frugal living mode! Cutting back on living expenses - alternatives for simple living
- re-examine why you work and how you live
- stop tossing your hard-earned cash away
- shopping, overwork, stress and debt (some refer to this as an illness quipped: ‘Affluenza’!)
- celebrate when you have money left over at the end of the month - indulge a little and reward yourself - rewarding patience and persistence! Not just the doing good and sticking with it
‘How to set up a Family budget’, is advocating a new code of fiscal honor for our families, so to speak. It proposes family budgets, that ask for wisdom (best choices and decisions), discipline (sticking to it), honesty (no cheating), persistence and celebration when we do it right!
THE RATIONALE AND PROCESS OF BUDGETING
Here are twelve good reasons to get you started:
1. Family budgets are used as a baseline, analysis-tool and roadmap. It is a useful tool and guide. It tells you whether you are headed in the direction you want to be headed in financially. It helps you to move from spending to saving and good fiscal balance, management and responsibility.
You may have goals and dreams, but if you do not set up guidelines for reaching them and you do not measure your progress, you may end up going so far in the wrong direction you can never make it back. Can you imagine the government or a major corporation operating without a budget? No, and neither should you.
2. It is often described and justified as an empowering enabler. A budget lets you control your money instead of your money controlling you.
3. A budget is a realistic estimate and true reflection of current circumstance and means, a type of financial situation-analysis that will tell you if you are living within your means. Before the widespread use of credit cards, you could tell if you were living within your means because you had money left over after paying all your bills.
There are lots of family budgeting tools available on line that make it a fun and enjoyable task and activity, to assess and analyze your family’s financial situation with minimum effort. (www.MoneyPants.com)
There is also lots of free financial software and most of it sets up easily and provides you with a detailed family budget online. It manages your finances, hassle-free and almost effortless.
Well, almost! It will require input and minimum effort through hands-on involvement in setting it up, populating, maintaining and editing it. Mvelopes.com is a good example of market offerings that are available at no cost to you, just waiting for the motivated family budgeter to embrace and try it out!
Some websites offer free financial newsletters by e-mail, with lots of money saving tips, budget advice, and other relevant personal and family-related financial information (www.planabudget.com).
The availability, accessibility, virtual marketplace, ease of use and more of credit cards has made the need for family budgets much less obvious. Many people do not even realize they are living far beyond their means until they are knee deep in debt, struggling to make ends meet and sinking fast into murky financial waters.
Budgeting is and can be a life and money saver, a reality check, BUT ALSO a remedy!
4. A budget can help you meet your savings goals. It includes a mechanism for setting aside money for savings and investments.
5. Following a realistic budget frees up spare cash so you can use your money on the things that really matter to you instead of frittering it away on things you do not even remember buying.
6. A budget helps your entire family focus on common goals. It is unifying families in mutual purpose and effort, working together towards a successful outcome and reward.
7. A budget helps you prepare for emergencies or large or unanticipated expenses that might otherwise knock you for a loop financially.
8. A budget can improve your marriage. A good budget is not just a spending plan; it is a communication tool. Done right, a budget can bring the two of you closer together as you identify and work towards common goals and reduce arguments about money.
9. A budget reveals areas where you are spending too much money, so you can refocus on your most important goals.
10. A budget can keep you out of debt or help you get out of debt.
11. A budget actually creates extra money for you to do use on things that matter to you.
12. A budget helps you sleep better at night because you do not lie awake worrying about how you are going to make ends meet.
Nevertheless, despite all these wonderful reasons quoted above, people are still hesitant to commit to family budgeting as standard practice in their households. We might again want to probe a little deeper still and ask why?
May 26th, 2008 at 11:49 pm
[...] the inflation which will hit them in numerous ways. I recommend an article I read recently called “General Strategies for Setting up a Family Budget” by Anchor Retirement. Their tips are simple yet [...]