If you do not control your family finances, they usually do not “behave” well. Having them studied and well organized becomes necessary, especially when we have some debts to pay off or our income is not as satisfying as we would like it to be.
You will need a few hours and clear mind enabling you to focus on this one certain thing for some time. There is no sense to create the family budget only to feel that we at least have done something. We need to make an effective plan which will help our finances be back on track. Here we suggest how it can be done in steps:
- Find a goal. It can be paying off the debt, increasing your credit score, or organizing money for college. You need a goal to know where you want to get to.
- Decide how you want to work on it. You can sit with a pen, some paper and a calculator and do it all “traditionally”. If you like to use new technologies, there is good news: you can find a budgeting software like com and have it done much easier and faster.
- Sum up both income and expenditure. Divide your money for two categories – income and expenses – and find a total for both. If the outgoing part is bigger than the income, do not get nervous – you are going to control this.
- Look closer at the expenses. You should analyze this category and divide it into subcategories like utilities, secured and unsecured debts, other spending (eating out, clothes, books etc.)Next, focus on the Other spending It contains the most changeable items (for instance, you can decide to stop spending money on eating out).
- Use the Ledger, Spreadsheet or Budget Software. Add the totals and categories to the ledger, electronic spreadsheet or a budget software. In this step, you will see the shape of your budget. Now, your task is to make your expenses lower than the income.
- Stay in control. When your budget becomes visible and realistic, it will be much easier to gain control over it. Focus mainly on reducing expenses in Other spending category – it is the most flexible one. Our tip is to keep money that you are going to spend, in cash – it makes you aware of how much you are spending and helps avoid overspending.
- Pay off the debt. Debts are the main problems of many families. Try to get rid of it as quickly as it is possible. Make at least minimum payments, but if there is a possibility pay even more than the minimum. Apart from having the debt out of the way, paying more than the minimum sometimes can mean that you will pay less interest. But you need to ask your creditor about your certain case.
There are free budgeting tools which can help you create a realistic budget for your family.
Why not to use them and gain the control over your finances?
In case you still have problems with your debts and finances, you can also use a help of a free credit counseling service.
Do not give up, create goals and meet them!