How To Develop A Good Budget For Your Financial Well Being
Posted at by ifydcat on category Personal FinanceThe monthly budget is the cornerstone to a sound financial plan and is a necessity for peace of mind for you and your family. There are some basic rules to follow when creating your budget that can make the whole process a snap. The advice below will show you how to make a budget that is right for your needs.
Gather information about what items you consider necessary to buy every month. Write down this list of your expenses. Include items such as food, clothing, gas, utilities and insurance premiums for your cars and home. Once you have completed your list, take each item and decide on a reasonable estimation of how much you will spend from your paycheck. To begin with, keep your categories simple and add additional lines if you wish to keep a special eye on a specific area of spending.
The easiest place to begin is with how much you plan to spend on your food each month. The primary number will be your total for shopping at the supermarket. The actual amount you spend each month may vary because it depends on several factors. One month you may find coupons are plentiful and you may spend a bit more on stocking up to take advantage of the good deals. Another week you may find that you spend less because you have been invited to dinner at a friend’s house or you go to a party and need to cook fewer meals. Your budget amount for food shopping should reflect an average amount that you need to feed your family.
There are also times when you find that you will be eating away from home. Make a separate line in your budget to cover your restaurant visits, lunches away from home and stops for your favorite coffee. It is helpful to keep this number separate because it is a budget item that is often a matter of choice and can be adjusted as needed to cover other expenses.
Buying gas for your car is another major item in the family budget. Unfortunately, it is taking a bigger and bigger bite out of the family paycheck and it is important to have a realistic idea of how much your family spends on gas each month.
Next, list the amounts that are needed for recurring monthly bills. Add a line to your budget for each of your home expenses, such as mortgage, home owners and car insurance and property taxes. These are easy to put in your budget because they are usually a specific set amount.
Other household expenses, such as heating bills and other utilities can be more difficult to pinpoint because the monthly amount may vary. As a rule of thumb, it is better to select an average amount that errs on the side of being higher to give yourself a reasonable cushion.
Your family budget should also include any debt items that you are paying off and the estimated monthly amount. Paying off old debt is essential to your financial health and should be considered an important item to be taken seriously in your budget.
As you can see, it is easy to create a solid budget to guide your family spending if you use the basic ideas in the article above.