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 It's not always easy to meet our financial obligations each month. And that's where creating a family budget can help out. Nearly every day we have multiple financial demands placed upon us. Whether it is grocery shopping or paying the monthly electric bill, we're faced with family budget decisions all the time.
Family Budgeting
It's always difficult to deal with financial planning matters such as family budgeting. It always seems like there is one more bill to pay or a big decision needs to be made on an expensive family vacation. But no matter how people might try to deny it, this is a hard rule of life:
We make decisions all the time that affect our ability to stay out of debt.
That's right, family budgeting is all about choosing between the options available to us including those that help us to stay out of debt. And one of those important options includes creating a family budget that meets our individual needs. Unfortunately, for many of us budgets are a reality check that we try to avoid.
For example, our budget might tell us that we make enough money each month to pay that electric bill but we need to give up going out to eat twice a week or buying such expensive clothing. These are the types of decisions we are talking about.
Creating a Family Budget
If you've been paying bills for at least 12 months or so, then creating a family budget is pretty simple. You know by now how much you spend each month on food, clothing and entertainment. Creating a family budget is all about pulling that information together and organizing it into a form that you can analyze.
If you're looking to create a family budget, then you've come to the right place. Not only do we already have an entire series dedicated to household budget basics, but we are going to supplement that information with three new tools.
Family Budget Worksheets
We just created two more family budget worksheets. The aims of these worksheets are to help you compare your budget to that of an average family. Using information gathered by the Bureau of Labor Statistics, we've put together the following tools to help prepare and guide you through the process of creating a family budget. And the nice thing about our budget tools is that you don't need any special software to get started.
Family Budget Calculator
If you want to make a simple comparison of your monthly family expenses or your annual expenses against that of an average family, then your first stop should be our family budget calculator. This calculator allows you to input your monthly or annual expenses in each of fourteen different areas.
The budget calculator then compares your family's spending pattern or budget, against those of an average family as measured by a survey conducted by the Bureau of Labor Statistics.
Family Budget Spreadsheet
Next up is our family budget spreadsheet. This spreadsheet allows you to go through the monthly family budget planning process. This is a very simple budget spreadsheet that can help most families get started. You can use the spreadsheet to see what happens as you vary the budget values and print out each scenario to make visual comparisons.
This spreadsheet allows you to not only create a budget, but also enter your actual family expenses during the year and track variances - which are the difference between budgeted and actual values. So for example, if you've budgeted $2,500 for a family vacation and you spend $3,000 on a vacation, you'll see a budget variance of $500.
As is the case with all of the tools we create, this family budget spreadsheet is free to use and download. And all of our spreadsheets come with instructions and tips on how to use them properly.
Average Family Budget
Finally, the third budgeting tool we've created is an average family budget spreadsheet. All three of these budgeting tools are in the same exact format. And what this tool allows the user to do is actually quite interesting.
By simply entering your monthly income and desired level of savings, this spreadsheet uses the information for an average family to project the spending levels for each of fourteen different expense categories. If you're looking for examples of what average family's budget is for everyday expenditures for their household, then you'll want to take a look at this worksheet.
Family Budgets that Work
Now that we've explained all the help we're providing to assemble a family budget, it's worth taking the time to briefly discuss how you go about putting together a family budget that works in your individual situation.
These are really going to be a few simple rules that will help you stay out of debt. There is a lot of detailed information in our series on creating a budget worksheet. There we go through a step by step approach to creating a family budget.
So tips we'd like to leave you with concerning family budgeting are simply these two:
Simple Family Budget Rules
No matter how hard you think you can make a budget work, it has to follow this one simple budget rule:
Family Income must be greater than Family Expenses
Families that find themselves on the verge of bankruptcy, or in debt, are in that situation are in that situation because they chronically break this simple rule. If you don't have the right balance, then you can do two things:
- Increase family income
- Decrease family expenses
If you start the year or create a family budget that is not balanced then you are only kidding yourself. Don't plan on hitting the lottery, plan on paying your bills.
Starting a Budget
Finally, everyone has to start somewhere and that includes making mistakes and even creating unreasonably demanding family budgets. The single most important learning you'll experience from taking the time to create a budget is the actual thought process you're going to go through.
By taking a close look at your sources of income and where all the money goes each month, you'll generate better ideas on ways you can save money each month.
About the Author - Family Budget Basics
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