Part 2 (1/2)
If you are paid weekly, divide each budget item into 4. Cash flow management will form a big part of your fiscal strategy, once you have put your budget pen to paper and mapped out the needs and requirements. Utilize your cash, checking and savings account (if applicable) to pay for expenses. Do not pay your bills with your credit card!
Keep track of all your discretionary spending. A financial diary for a week is always a good idea to scribble down in every time you withdraw money, pay for something or open your purse without thinking.
This will provide you with insights you did not have before on where the money actually goes.
It will also carry within it, clues to adjust budget lines if actual cost is higher on certain items.
Spending patterns and behaviors will emerge that might surprise or shock you!
Having some wriggle-room and discretionary spending is always motivation. The occasional treat and indulgence, special night out or other family activity is that more enjoyable, if you know you have worked hard to earn it and deserve a pat on the back for all your fiscal responsibility and discipline!
Always keep one eye on the future folks... budgets might need to change again and again for a variety of reasons. You can never feel you have ”arrived” completely and that your budget is set in stone. Family and life often throws us a curve ball or two, banks, service providers, government and fate sometimes do too!
Changing budgets should not be a source of frustration for you; it actually shows you that your family budgeting process is actually working. It is a real-time pulse and mechanism to capture these changes, which will leave you prepared and informed, ready to act and respond appropriately. This impetus for change can come from different sources.
Here are some examples: Change of income, goals, rising prices, goals reached, family growing, moving and or relocating to a new place, family getting smaller, new spending habits, change in lifestyle or unplanned 25 expenses.
If you can stick with it and see it through a family budget can help you meet your goals, get and stay out of debt, pay your bills on time, every time, keep track of your spending, cut costs and stretch your dollar to the max!
HINTS, TIPS, TOOLS AND TRICKS FOR SETTING UP A FAMILY BUDGET.
”Creating a budget” captures in its expression and meaning, both the excitement and the apprehension most of us feel when we have to face our financial situation and or lack of apprehension most of us feel when we have to face our financial situation and or lack of planning and accountability in that area planning and accountability in that area.
Most businesses would fail if they ran like we manage our household incomes sometimes. This is not a natural thing for people to want to do. It falls into that 'I will if I really have no choice'
kind of categories.
However, worth mentioning is that we spend most of our waking hours at work, earning the cash we need to get by and cover our living expenses. Then, we do not take the time to plan what to do with it. We just respond, spend and move on, spiraling, circling around, aimlessly and oblivious mostly about the state of our financial affairs.
This is obviously not true for some of us, for whom planning and organizing comes naturally and budgeting is like second nature and breathing, we just do not think about it, get it done and then barely spare it a second thought. Both these types of approaches can hurt us in the long run.
Our society has also become so fast-paced and focused on success, that we sometimes lose sight of the future perspective, enjoying life and what we do have. We cannot really focus on our own financials for lots of ”excuses”, sorry reasons we provide like: trouble slowing down, taking a step back and evaluating our financial situations or not knowing how to set up a family budget.
One of the first hints or tips we provide is advocating fiscal awareness. This means evaluating openly, freely and honestly where things are at today for your finances and household. This means evaluating openly, freely and honestly where things are at today for your finances and household.
The whole purpose and goal of creating or setting up a family budget is to enlighten and alleviate 26 money pressures. Utilizing a tool that can a.s.sist you in getting back onto the road to financial freedom, fiscal responsibility and financial, budgetary health, positive cash flow, with money to spare would be the ideal work-tool to grasp and grab! As the previous pages have shown the process in itself is not altogether that difficult.
You can certainly see how this real-time, 'dollar and expenditure tracker' can a.s.sist you to be agile and respond to market, family and monetary pressure, changes and crises. Continue to revise and update your budget as your needs, family and circ.u.mstances change.
Money is such a daily necessity and ever-present in our comings and goings. There is no escaping it. It is everywhere and needed anywhere and all over. We have different currencies, structures, procedures and all around the world, but in the end, it is the currency that makes the world go round, fueling the global economy.
Seen from that perspective, we often feel that taking control of our own finances and expenditures will not have much of an impact, as we are all at the mercy of the wheels and gear of a churning economical machine, with government and banking rules, regulations, trade and principles, ethics and decision-making that affects our quality of life. However, this is simply not the case!
Good money management skills in the household is crucial, not only for survival and good financial state of affairs, it teaches our children how we think handling money should be taken care of. They watch us so closely.
We model certain behaviors, spending patterns, discipline or maybe throwing all caution to the wind with credit card spending, debt and reminder notices all over the house, creditors calling, afraid to walk to the mailbox to remove the bills, and more.
What chance do our children have to end up entangled in that spiraling and vicious circle we spoke about earlier? Money in, money out?
How do we get to the point where family budgeting is a learning tool to help us teach our kids to work better with their funds? Whether through allowances, mutual savings goals, their own account or more, as parents we have an opportunity to instill some solid financial skills early on in life that will a.s.sist them later, as they work toward their independence and family budgets of 27 their own!
Do some of your own soul-searching before you start your budgeting process. How motivated are you to plan, set-up and stick to a family budget? Would you do it now? Today? If you knew how?
Then let us get started, together. There are lots of practical suggestions for setting up a family or household budget. We will never be able to cover them or the mechanics and intricacies all here at once. You will however continue to find in these pages valuable insights and t.i.t-bits to help you pursue better fiscal management and cash flow, budgeting in general.
It is all about making your dollar go further. Investing in the time and effort that it will take to get to that point of greater financial security and possibly even have a surplus take to get to that point of greater financial security and possibly even have a surplus eventually! eventually!
1: Take stock and face the facts head-on, honestly and with serious commitment, drive and purpose. a.s.sessing your own capital worth and a.n.a.lyzing your home life and situation from a financial perspective is of utmost importance.
2: Plot your own course. Formulate some financial goals and lay out your own roadmap on how to get where you need and want to be financially speaking.
3: Take a thorough, critical and factual look at your fiscal situation and status. Unbiased and honest is best. Get a most recent credit report and look over your bank and credit cards statements, tax returns and other financial sources of information: stock portfolio, RRSP's and more.
Get a financial planner to a.s.sist you if you are unsure about what to use and include or not in this a.s.sessment. You might also want to take a broader perspective and discuss retirement, priorities, insurance needs, will and testament and more, because, like financials, we never seem to take 28 these crucial life planning tasks and to do very seriously and barely give them second thought or time of day! The time is now and the place is here to take control of your financial situation and life.
4: Committing the time and effort to build your financial action and spending plan, budget and goals should get priority and might just be the most valuable undertaking and time well spent, not wasted you might ever set aside!
5: Think of how you define your own financial worth. Reflect on what it is, what you base it on.
Is it concrete data and fact, perception or maybe even a wild guess or estimate? Income, savings and all of your other a.s.sets work together to give you the whole fiscal picture.
This side of the balance sheet for most people remains fixed and is relatively easy to do, when they put their minds to it.
6: Always remember that this process and doc.u.ment known as a family budget is only going to be as good as the data and updates you provide! When acquiring new a.s.sets, ensure that this side of the balance sheet is strengthened appropriately!
7: Adjust your focus slightly to more in-depth and longer term. We live so much in the moment, especially if we purchase things or spend our money. We just look at the cost today and do not think of interest over time and this being the total cost of course.
8: Actually setting financial goals will also energize you, give you a reason to work towards something meaningful. You might even start to enjoy uncovering opportunities for frugal choices, 'penny-pinching' and what we prefer to call creative savings techniques!
9: Become financially literate and master the family budget process, tools and worksheets, spending logs. Demystify some of the complexities and just try some fiscal responsibilities, without being overwhelmed by the intricacies of calculations and more.
Remember, there is always professional help out there, once you have gotten started, completed the grunt and groundwork to move in and on to a comprehensive consultation with a personal, professional financial planner, who can explain the lay of the land, impact of your situation and plan in more detail.
29.Most of them will offer the first consultation free to a.s.sess your situation for you. Most of them utilize state-of-the-art software and technology industry-related and customized tools that shed light on even the darkest situation, to find a little ray of hope and a couple of dollar at the end of the tunnel. There is a way out of the abyss.
10: Family budgeting can be used to teach you good fiscal habits: get in the habit of paying in cash, using your credit cards only for emergencies.
Learn how to stop buying on impulse and use your willpower to walk away, say no thank you and leave it at that. Shop at wholesale and discount department stores. Respect your budget limits and stick to it. Buy generic medicine and support your discount pharmacy.
Always try to find ways to supplement your income, part-time jobs, your own business or rent a room or floor in your house, offer storage, invest in real estate and take in a boarder or tenant.
Turn your thermostat way down in your house and turn off a few lights. Winterize your house from top to bottom. Eliminate and treat areas where heat and energy is lost. Cut back on home and cell phone use. Check insurance policies shop around and raise your deductible to lower your monthly bill.
In isolation, these probably do not have a lot of impact individually, but when they are combining in a well-planned, cleverly executed family budget, with discipline and consistency, they will start to make a difference and you will start to see the benefits and impact on your bottom line.
11: A family budget is a learning tool and process to empower individuals and families to better self-manage their financial resources, spending, cost cutting and household finances. In general You will be able to set-up your own personal or family budget.
By tackling the skill and mastery of smart budgeting, you will have a greater understanding eventually of exactly where and by how much, you need to adjust expenses to either live adjust expenses to either live within your means within your means or or know how much extra you need to maintain your current lifestyle know how much extra you need to maintain your current lifestyle.
12: Other family budgeting process steps will require you to be able to identify and categorize all your expenses and, coupled with an easy to set-up and follow filing system, create the 30 backdrop and framework for all future budgeting and fiscal planning at home or elsewhere.