A very practical guide to family budgeting
Budgeting does not need to be complicated. You don't need a master's in accounting. You don't even need a computer ... a simple pen and paper will do!
A good family budget performs the following functions.
- Keeps your bank account in the positive
- Helps you get out of debt
- Helps you save money for the future
- Helps you spend your money on what is most important to your family
There's not much else to it. As long as your family budget meets the above criteria, you've accomplished a lot.
How do you create an effective family budget?
First of all, avoid convoluted software programs that want you to devote an entire weekend to categorizing, analyzing, and so on for the sake of creating the perfect budget.
Perfectionism, when it comes to budgeting, is a huge waste of time.
Car Finance- Quick & Easy
If you are in the market for a new or used car, then we're in the market to help you arrange the money. Our car loan & leasing finance service is backed by a national panel of car loan specialists who will establish your eligibility, find lender/s offering the best deals for your situation - and help you through the approval and settlement process. No charge to you - and no obligation to proceed with any recommendations offered.Reality has a funny way of sometimes not giving a damn about what you've gotten written down in your budget.
So, relax and just give it your best shot.
- List your income, how much and when during the month that you receive it.
- Then, list your recurring expenses ... how much, to whom and when during the month that you pay them.
- Next, ballpark any other expenses you can come up with off the top of your head ... things like groceries, fuel, etc. and list those too.
All of these steps can be done with just you and your spouse, a pad of paper and a pen or pencil.
If you want to get a little fancy, a spreadsheet or simple budgeting software can help a lot.
Add up your income and subtract all your expenses in one monthly total.
That's it ... you've now created a rudimentary budget.
If you're in the negative you know you've got a problem.
If you're in the positive, you're either doing really well or you've forgotten something.
Keep working on your master list until you're comfortable with it.
Checking your budget against your online or paper bank statement can be very helpful in finding things you've forgotten.
Since this is a down and dirty, practical guide for your family budget, I'll throw in a few more suggestions to help you along the way in the months to come as you refine your raw budget into a beautiful work of art:
Keep it simple.
- Having 150 categorization buckets make financial charts look pretty but they won't give you much more than a headache. This is a practical family budget we're talking about ... not a second job filled with painful number crunching.
- Stop using your credit cards and make a plan to pay them off ... permanently. You've got better things to be doing with your money than giving it away to credit card companies.
- After paying off your credit cards, start saving at least 10% of your gross income. Invest it wisely to ensure a safe and good return. Everyone's situation is different, so you should obtain the advice of a professional financial advisor before making any major decisions.
- Become aware of the concept of cash flow. You will need to forecast your daily bank account balance for your budget to really sing; this is where spreadsheets and budgeting software can help most.
- Always keep some fun money in your family budget. A draconian, taskmaster budget can quickly kill everyone's enthusiasm for following it. A good family budget can greatly enhance the quality of your family life.
There are many more details that we could go into, but the above is the meat and potatoes, practical side of creating an effective family budget.
Follow the above tips and create a basic, easy to manage budget for your family today!
Published: Thursday, 13th Aug 2020
Author: Paige Estritori
Finance News
| NAB Offers a Glimmer of Hope with Fresh Interest Rate Cut 23 Jul 2024: Paige Estritori Australian home seekers facing stiff challenges may find a bit of relief from an unexpected source: NAB, one of the country's financial giants. The bank has recently slashed its three-year fixed home loan interest rate by a notable 0.6%, bringing it down to 5.99%. - read more |
| Australian Markets React to Employment Data: Shares Narrowly Lower 20 Jul 2024: Paige Estritori The Australian sharemarket experienced a modest pullback on Thursday, ending a day of fluctuations just shy of its recent peak. A day following the celebration of a fresh 52-week high, the market's mood shifted. - read more |
| ANZ Prepares to Finalize $4.9B Suncorp Acquisition 18 Jul 2024: Paige Estritori ANZ is poised to officially acquire Suncorp's banking sector on August 1, following recent modifications to Queensland's legislative framework essential for the $4.9 billion transaction. - read more |
| Housing Crisis in Australia: Deeper Trouble Ahead 16 Jul 2024: Paige Estritori Australia is grappling with an increasingly severe housing crisis as rising interest rates and skyrocketing construction costs stifle the supply of new homes. Experts fear that the national goal of constructing 1.2 million new homes over the next five years will remain out of reach. - read more |
| Australian Households Face Toughest Economic Times Since '90s 15 Jul 2024: Paige Estritori As Australia's economic climate continues to worsen, households are encountering unprecedented financial challenges, marking the gravest consumer recession since the early 1990s, excluding the impacts of recent pandemic-related downturns. - read more |
Articles
| The Beginner's Blueprint to Creating an Effective Family Budget In a world marked by economic uncertainties and the ever-mounting cost of living, the importance of a sound family budget cannot be overstated. Today's economic climate necessitates not just prudent but strategic financial planning. With the right budget in place, families can navigate the choppy waters of their finances, avoiding the all-too-common pitfalls of overspending and under-saving. - read more
|
| Busting Myths: The Misunderstanding About Debt Consolidation and Debt Reduction Welcome to our comprehensive guide where we aim to debunk common myths surrounding debt consolidation and debt reduction. This blog post serves as a beacon of clarity for those who find themselves navigating through the choppy waters of financial jargon and conflicting information. - read more
|
| Smart Budgeting: Building a Financially Stable Future Many Australians today find themselves navigating the choppy waters of financial instability. The burden of debt weighs heavily, affecting everything from daily stress levels to long-term planning. High interest rates, unexpected expenses, and the seductive ease of credit cards contribute to a culture of borrowing that can lead to a precarious financial situation for many. In this introduction, we explore how smart budgeting is not just about scraping by, but laying the foundations for a financially stable future. - read more
|
| The Reality of Debt Consolidation: Does it Affect Your Ability to Borrow in Future? Welcome to a comprehensive guide aimed at dismantling the common myths that cloud the concepts of debt consolidation and debt reduction. Amidst widespread financial stress, debt consolidation emerges as a popular strategy for Australians in search of relief from their monetary burdens. - read more
|
| The Ultimate Guide to Achieving Financial Freedom Through Debt Restructuring Financial stability is a common aspiration, yet many Australians find themselves weighed down by the burden of debt. Whether it’s due to loans, credit cards, or unexpected financial emergencies, the struggle to stay afloat is a reality for countless individuals striving to achieve their dreams of a secure, debt-free future. - read more
|
|
Managing Your Credit Card Debt Wisely in Tough Economic Times In light of the current economic challenges facing many Australians, managing credit card debt has become more crucial than ever. With rising living costs and financial uncertainty, accruing debt on high-interest credit cards can quickly escalate from a manageable inconvenience to a stressful financial burden. - read more
|