Okay friend, you want to save money, you’re willing to learn, it’s obvious, after all, you are HERE! To develop a successful budget for your family, there are a few key secrets that you have to understand and follow. In fact, there are 5 keys to budget success, do you know them all?
5 Keys to Budget Success
Unless you’re Single, then your spouse should be on board with the budget. You both need to have a clear understanding of what the monthly expenses are, where the money flow is headed (to the bills, to your favorite restaurant or bar every Friday night!), as well as who is responsible for physically paying the bills, (writing the checks, clicking the online bill pay, etc).
On top of that there are spouses with spending differences, which can be both a money and a marriage blunder that will put the kabosh on a successful budget.
2. Put it in Writing
In order for your budget to truly work, it’s got to be in writing! Sit down together and make two columns on plain piece of paper. In one column, list all of your expenses, don’t forget things like pet care, daycare, even magazine subscriptions. In the other column list all sources of income, be sure to include any side revenue that is generated for the household.
If you feel more comfortable using a budgeting template to help avoid forgetting expenses or even potential income streams, you can print our a number of different types of budgets here.
3. Understand Your Income
This sounds relatively easy, but in my experience many folks just don’t know what their income truly is. For those who receive their pay on a weekly basis, grab your check stubs, take a look at how many deductions are being withdrawn weekly, insurance expenses, 401K (find out if your work is matching your 401K!) This is an avenue of free money that you could be missing out on.
Sometimes, viewing your expenses vs your income in a percentage point of view makes a difference in your spending habits. For example, if you make $2,000 a month and you want a new truck with payments of $500 a month than 25% of your income is going to your vehicle- and that’s not including insurance, excise or personal property taxes, title and yearly registration fees.
Income is often a bit dodgy if you happen to be self-employed. In that case, simply figure out how much income you average per month and use that as your guideline for your budget.
Priorities, Priorities, Priorities. This is a serious must-do. Once you have written down all of your expenses on paper- get a clean sheet of paper and rewrite them in order of priority. If your house is your biggest priority, put your mortgage at the top.
Use a program, such as Quicken, to track your expenses but be sure to print out a copy of your budget once it’s completed, tack it up in a place where you AND your spouse can take a look at it everyday. No, this isn’t to worry you and make you wonder where you’re going to get enough money to pay the bills, this is to remind you of what your expenses are, where your money needs to go and what your goals are.
5. List your Goals
The fact is, most couples don’t plan to fail, but many fail to plan. If you haven’t discussed with your significant other what your goals are and you are not both in agreement of those goals, you will not reach them.
On the bottom of your budget, write your goals down. Perhaps your goal is to have your house paid off and be entirely debt free, write it on there. Alternatively, if your goal is to Retire at age 55, put it down on paper. Seeing your goals on paper help them to change your mindset and ensure they come to fruition!
If you follow these key points, you will be well on your way to creating a successful family budget.