Ok, so you are having trouble making ends meet. Believe it or not, you are not the only one, but a budget will help you get organized financially, and it may not be as bad as you think! You really do need to balance your expenses with your income, or at least know how you stand.
l’ll help you to do something about it. So, take a deep breathe, get a cup of coffee and a calculator, then:
Make a list of your expenses, yes, all those little items too. You can not reduce expenses if you don’t know what they are in the first place! You’ll need to include costs for the following:
Housing – this is probably your biggest expense, and one you may not be able to do anything about. If you are renting a home, then maybe moving to somewhere a little smaller would be an option, but remember, moving costs money too. Don’t forget to include property taxes if you are a home owner.
Transportation – if you own a car, then try to combine trips so that you do not use as much gas. Try using public transport, car pool to the kids school or sports events, or walk. Walking is great exercise, and a good family outing.
Food – basic groceries for one person are about $150 per month, but if you eat out that cost will soon rise. Even a couple of fast food meals add up significantly when they are for your whole family. Try buying some frozen meals for the occasional treat when you are too tired to cook. Try buying in bulk, and cooking in bulk, freezing the extra food for another day. Do the kids need bottled water for their sports days? Bottle your own from filtered water from the fridge.
Utilities – include all those additional bills like cell phones, home phone, water, electricity, gas. Keep an eye on your cell phone plan, and see if you can reduce the cost of your plan. Would a family plan work better? Check your long distance phone plans and see if you can get a cheaper one, or don’t call long distance as much, text message (if you have a plan), or it’s cheap, or email instead. Try to conserve energy. Turn off lights, keep the thermostat low, and if cold wear a sweater. If you have air conditioning, try to keep the temperature reasonable.
Personal – this section is huge, and covers things you want not necessarily need. For example, if you take up walking, you may not need that gym membership. And what about cable tv? Do you really need all the channels you get? Stop eating junk food, or at least reduce the amount you eat. It’s expensive and doesn’t do your body any good. Ditto smoking.
Clothing – this is a tough one, especially with children who have a habit of growing! Teach them about value for money at an early age. Help them to budget. Would they rather have one really good pair of jeans, or 2 pairs of cheaper ones? Let them answer this, and set a limit on the cost. Brand name jeans do not always offer the best value, especially when they are going to be outgrow them in a couple of months.
Savings – try to save regularly, if your family will allow it. And it may be worth taking some of your savings to reduce your debt. When your children are old enough for an allowance, help and encourage them to save too.
Debt – try to reduce these as much as possible. Pay at least the minimum on your credit cards. It may be worth taking money from your savings to pay down your debt, but make sure to get back some savings as soon as you can ready for those unexpected costs that go along with having children.
OK, so now you have a list of expenses. Now write down all your sources of income. Your expenses should not exceed your income. if it does then you have to cut down some more. Maybe you can reduce the number of bought coffees you consume, or have lunches at a different friends house each week, instead of going out to eat. Take a bagged lunch to work, pack lunches for the kids on game days instead of stopping for fast food etc.
With just a little thought and effort you can reduce your expenses. Remember to look at your budget at least every quarter as you’ll find that expenses do change. Over the summer, you’ll need to plan for a holiday, and of course, the fall has all those back to school expenses.
