Setting Up a Budget For Family Financial Planning
When setting up a budget for family financial planning, get a handle on your spending habits or just become better with your finances overall, you begin to take that much needed path to real financial freedom.
Doing so is a good way to let your family know that their spending habits do have an effect on the overall financial health of everyone there. In addition, it helps you get a control of your spending and see where it lies in the bigger picture.
Taking this step will make it much easier to get that new addition on the house, pay off the car, take that family vacation or do whatever else it is you may be looking to save for. Of course, setting up a budget is something that is much easier said than done, I know. It takes actually formulating a plan and then selling your family members on the idea.
This in itself can be one of the more difficult parts of the budgeting process. I have a few solutions on how the idea of a budget and putting one together can be a tad bit easier to get started.
Fixed Expenses
There are some bills in your life that are going to be the same every month. Your rent or mortgage, car payment, student loan — these and many others are going to remain the same (are constant) no matter what you do. Each of these must be in your budget no matter what; becoming complacent with these is dangerous.
Variable Expenses
Your variable bills are the ones that change on a month to month basis. Your electricity bill, your phone bill are examples of variable bills -- ones that change each month. Each of these bills are to be averaged so you know how much should be saved each month throughout the year. Low in some months, higher in others.
Periodic Expenses
These are payments that happen not as often as weekly or monthly, but maybe quarterly or yearly. Examples would be if you pay your auto insurance once a year to receive a discount or gifts that are bought only at Christmas or birthdays. Since they do not come around regularly, it is very easy to forget them. Well, don't.
Factor In Unexpected Expenses
When setting up a budget, you must also factor in unexpected expenses as well; those things that you may not expect to happen but "know" will such as overage charges on Little Jimmy's cell phone bill or the emergency leg setting that Rover had to get.
Other Things to Consider
Adding up all of these things and wisely factoring them into your personal spending plan will help you figure out where your money is going and how to spend it better, more wisely. Do you really need the gold package or will basic cable do just fine? Perhaps a family sharing plan could keep your minutes down and prevent Johnny's overages on your cell phones. And if each family member has a cell phone, is a home land line phone with the long distance package really necessary?
Setting up a budget will work for your family financial planning and nest egg building better than you think. Simply get started. It will help you set spending rules for your family and get a handle on your monthly expenses. Acting on the knowledge you have just been given will add up to an incredible amount; not just financial, but emotional, physical, and spiritual as well. It will be like a ray of sunshine on a cloudy day!
The next article in this making a budget series gives you strategies and creative ways for budgeting money.
