One of the resolutions many make at this time of year is to get control
of our money. First step is to write it
down and that means making a budget. The biggest issue many of us face is once
we have made a budget how do we make it work for our family and us.
As we move
ahead with our plan, life gets in the way: we forget to document a few
expenses, we overspend, and pretty soon we are back to square one –
frustrated with and wondering what went wrong.
A budget is a
lot like a diet. You can have the best intentions to follow it and stick it
out, but it only works if you actually do it and have support of others
when you are doing it, that is why Jenny Craig and other diet services work
better than going it alone.
Old view of budgets
Old view of budgets
- I’m going to learn some unpleasant news, so I should not look at it
- I’m going to have to spend one entire weekend a month staring at spreadsheets and getting frustrated like my parents always did
- There are going to be a hundred categories to track
- I have to know where every cent is going
- Since it’s so hard, I need it all super-automated so I have some hope of keeping track of it
- The point is to help me know where my money is going in general and make sure I’m not spending beyond my means
- I do need a spreadsheet with a bunch of categories
- I need to look at my budget frequently for it to help me adjust my spending habits, so automating it is out of the question
To create an
effective budget go online and do a Google search for free budget spreadsheets,
or go to Google Documents Template Gallery and do a search for “Budget” find one
that suits your family and download it.The templates are easy to read,
simple to follow, and as uncomplicated as possible.
While your
budget should be simple, it should be inclusive. Be sure to have categories
for not only your income and regular expenses (mortgage, rent, car
payment, monthly bills, etc.) but also your irregular expenses such as
gifts, holiday spending, and medical. Every item of your income should fit into
a category – from bills, to daily expenses, and beyond. If there’s any
income left over after all of your expenses put that money into your savings
category, which can be sub categorized. For example, I have a savings category
set aside just for my Golf holiday and another for Taxes and one for Travel so
that I am saving all year long.
A key point
is that your Budget will change
– often by the month! Maybe you have started a new job, moved to a new
home, or paid off a small debt – your expenses and incomes may be
constantly changing and so your budget should be flexible. So adapt your budget
each month to reflect the changes and shift your spending accordingly. No
family has a budget that stays static every single month, so do not expect
yours to. Review your budget, if not once a month, every two months so you can
update it to reflect your current circumstances.
Define Your Goals
What is your
family hoping to save for? Perhaps you dream of buying a house, taking
your family on an overseas adventure, helping your kids graduate from
university debt-free, or maybe you want to pay off that credit card debt!
If you write out or visualize, or talk about your goals, you’ll find
it much easier to muster the discipline to make it happen.
A budget is
not yours alone, it belongs to the entire family and the family that plans
together, saves together. Find a time to sit down with your family to
go over each aspect of your budget, from creation and implementation. Let
everyone get involved! You cannot expect anyone to follow a budget they do not
understand, if you’re all on the same page when it comes to spending and
saving, you’re already one step closer to your goals!
There is no
sense in creating a budget if no one is going to track his or her spending!
Making sure that the budget is accessible to your family (you can share a
document via Google Drive or in Drop-box very easily!) means that you can
update it anytime and keep an eye on where you need to make changes.
If you do not
want to put the document online then keep pages in a budget binder at home that
you can add to as you perfect your budgeting strategy.
Like all
plans your budget may not work out the way you’d hoped. Give it time. You might
find you have been unrealistic about how much you spend eating at
restaurants, or entertainment. Your first few months are your adjustment
phase and you can rest easy knowing that it’s perfectly fine to do a lot
of budget tweaking during this time.
This is a
great opportunity to trim the fat from your budgeting. For instance, if your
family is eating out too much, make your budget smaller in this area and
let your budget force you to cook meals together at home. Dig through
your spending habits and find the places where you can trim away needless
spending.
Talk to
your family about the things you can all give up in order to save your hard-earned
money. Try library memberships instead of magazine subscriptions, walking
instead of driving, or hosting a clothing swap instead of buying brand new
clothes!
There will be
issues and problems as you work on your
family budget, but your ultimate goal here is to never give up. Money and
budgeting does not have to be such a taboo topic, so talk with neighbours
or friends about how they make their family budgets work! You may just be
surprised at what they tell you. Get help, help each other, and work together
to reach your goals. You can do it!
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