There are numerous advantages to budgeting as a family. Three of our favorites family budget benefits are as follows:
Instead of wondering where your money went, you’ll start directing it. You can begin to get everyone on the same page when it comes to money. By opening up lines of conversation, you’ll demonstrate that money isn’t a taboo subject and you will get more insight in your family budget.
Step 1 of the budgeting process is to make a list of your revenue.
The first step is to detail your income, which includes any money you expect to receive during that month.
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Write down each regular salary for you and your spouse, as well as any additional income from a side hustle, yard sale, freelance job, or other sources.
Put the lowest estimate of what you regularly make in this spot if you have an irregular income. (If you make more later in the month, you can adjust.)
Step 2 of the budgeting process is to make a list of your spending.
You can prepare for the money coming in now that you’ve planned for the money coming in. It’s time to make a list of your outgoings! (To help you estimate your spending, open an online bank account or glance at your bank statement.)
Begin by taking care of your Four Walls, which include food, utilities, shelter, and transportation.
Some of these are referred to as fixed expenses since they are consistent month after month (like your mortgage or rent). Others, such as grocery, vary.
And, to be honest, that grocery budget line is a little tricky to figure out at first. Just create a good estimate, and you’ll find out what you really need in the coming month.
After that, make a list of all additional monthly expenses. We’re discussing insurance, debt, savings, entertainment, and any other personal expenditures. Begin with fixed costs. Then, based on your spending in the previous months, utilize your online bank account or those bank statements to estimate anticipated amounts for everything else.
Step 3 of the budgeting process is to subtract your income from your spending.
When your revenue is subtracted from your costs, the result should be zero. That doesn’t mean your bank account is empty: it just indicates that every penny of your money is employed. (It’s known as a zero-based budget.)
If you have any money left over after deducting all of your expenses, make sure to include it in your budget! Otherwise, you’ll end up wasting your money on coffee and one-click offers of the day. Really. Put anything “extra” toward your present financial goal, such as saving or debt repayment.
What happens if you get a negative result? You might be thinking to yourself, “Yikes!” But it’s all right! Simply reduce your spending till your income minus your outgoings equals zero. Start with the lines for restaurants and entertainment. (We did go there.) You can’t spend more than you earn, after all. You’ve got it!
Keep in mind that you worked hard for your money. It should put in a lot of effort for you. Every. Singular. Penny.
