How to Create a Family Budget
Creating a family budget is a great way to track and manage income and spending, set attainable monetary goals, and, most importantly, keep everyone in the house on the same financial page. There are many different ways to create a family budget, but the following pointers provide some basic steps for a simple and straightforward start.
Income and Expense Inventory
The first step is to record all types of stable income. This includes everything from salary to child support. Although unnecessary for the most part, listing sources of income that are unstable or spotty is a matter of choice. To keep track of the incomes of multiple family members, create separate subsections within the income inventory.
The next step is to record all expenses, dividing this category into “fixed expenses” and “variable expenses.” Fixed expenses are those that occur regularly, such as mortgage or rent, child support, alimony, and taxes. Variable expenses include things such as groceries and electricity. Receipts and bank statements are helpful to estimate monthly costs and account for all spending.
This inventory can be recorded on a lined sheet of paper or a digital spreadsheet. A digital inventory may be easier, especially for managing multiple family members, but plain paper can work just as well.
Calculating Net Income
Simply put, net income is what remains after the expenses are covered. This figure is calculated by subtracting monthly expenses (including taxes) from monthly income. Ideally, this number should be positive. A negative number indicates debt. Regardless of the value, however, it is essential to write this number down in order to make necessary improvements or changes to the budget.
Modifying Expenses
If the net income figure is negative, some expenses may need to be adjusted. The easiest to modify are the variable expenses, which can be decreased simply by walking more to spend less on gas, using coupons and gift cards before they expire, or ordering water in place of a drink at restaurants.
Recording Spending
Even after the budget has been created, it is necessary to continue tracking spending. This will ensure that the predicted costs are accurate and that the budget is being followed. The longer you can track your spending, the more precise your budget will be.
This article was originally published on VictorNotaro.com.
Articles from Victor Notaro
View blogTeenagers are at an important stage in life. They are no longer children, nor are they necessarily a ...
Last year was full of unprecedented circumstances due to the COVID-19 pandemic. As the COVID numbers ...
When looking at blogs about buying a home, you’ll often find them discussing how you can budget to a ...
You may be interested in these jobs
-
Counter Salesperson
Found in: Lensa US P 2 C2 - 6 days ago
Consolidated Electrical Distributors Phoenix, United StatesSummary · Job title: Counter Salesperson · Job ID: · Department: Phoenix - Greentech Renewables · Location: AZ-Phoenix · Description · Summary: · As a Counter Salesperson, you will be responsible for assisting customers in person and over the phone, entering orders in syst ...
-
Warehouse Associate
Found in: Lensa US P 2 C2 - 6 days ago
Motion & Flow Control Products Salem, United StatesWhether you are a warehouse beginner or an expert there is a place for you at MFCP Join a rapidly growing & family-oriented company with plenty of room to grow your career. We provide training and pay progression plans, generous educational reimbursement, plenty of paid time-off ...
-
Vice President Quality Assurance
Found in: Appcast Linkedin GBL C2 - 16 hours ago
Juno Search Partners Swedesboro, United StatesGENERAL PURPOSE OF THE ROLE: · The VP of Quality Assurance & Food Safety will lead the Quality Assurance department and be · the authority on food safety standards and practices, the champion of a food safety culture and · the key to the company's commitment to providing safe, ...
Comments