Do You Plan Your Family Budget Every Month?
Almost everybody I know, which includes me, has let a budget get out of control at one time or another. I really think it used to be able to control personal finances because it was not as easy to spend money. As I work on my own budget, and as I speak to people I know, here are some common problems that get people in trouble.
- Debit and Credit Cards. It is just so easy to buy things by swiping a piece of plastic that we lose track of how much money we spend. A decade or so ago we spent cash or wrote checks. It made us think about spending money more as we had to carry enough money or go through the act of writing and recording our checks.
- More Services. I am old enough to remember the days when families had one phone number. One phone number meant one phone bill. Now almost everybody carries a cell phone, and we still have a home phone. Our phone bills have doubled or tripled. We also have cable TV and internet services to pay for. These used to be luxuries, but now we rely upon them.
- Busy Lives. We are very busy these days, and it seems challenging to fit in everything we want to do.. Because of this, we tend to eat out more. When we do eat in, we rely upon expensive convenience foods. With rising prices, it is hard enough to keep the price of groceries under control. But now we are spending a lot more on food.
Complete a Budget Worksheet
I would urge everybody to sit down with a budget worksheet once in awhile. But you really need to do this if you think your finances are out of control. The form should not take that long to fill out either. It is not important for you to be 100% accurate. It is important for you to understand how your family finances are working for you.
You should be able to document your income, expenses, and (hopefully) savings every month. If your income minus expenses is a positive number, you can relax a little. You still may want to work on your budget so you can save more for an emergency or retirement. If that number comes out negative, you could be in big trouble. Spending more money than you make means you must rely on credit. In turn, this means you are setting yourself up for more trouble because those credit card payments will get higher every month.
Plan Instead of Panic
But this is no time to panic. It just the time to find out the truth. As one major advertiser tells us, even if it is not good news, it is good to know! When you figure out where your money is going, you will be able to fix it. If you have no idea where your money is going, the problem will just get worse.
Simple Family Budget Fixes
Understand that most families do not get into trouble because of big expenses. They get into financial hot water much more slowly than that. These people may just spend a few dollars more than they make, but they do it over a period of time. So the problem just gets worse. Here are some solutions that others have used to save from $100 – $500 a month without giving up things they need or really enjoy.
- Consider putting yourself back on cash. If you think you shop impulsively because it is so easy to use plastic, try to give yourself a cash allowance every week. You may go over the allowance, but you will have to go to some effort to replenish it. This can be a great way to get a handle on spending.
- Do some comparison shopping for services. Many families have eliminated a land line in favor of cell phones or a cheaper internet phone service. My own cell phone company also sells home internet phone service for $10 a month. My old phone service cost me about $60 a month after paying fees and taxes. I even got to keep my old phone number. That was a very painless way to save $600 a year. I also did some auto insurance rate comparison shopping. I combined my home and car policies with another top company and saved almost $200 a month! Now my savings total is up to $250 a month, and I have not given up anything.
- Cut back. My family can enjoy a decent dinner at home for about $15. If we went out, that same dinner would probably cost $50. And some meals, like tacos, spaghetti, chicken, or steaks, really do not take that long to make. If you plan to have some leftovers for lunch or another meal, just a little effort can save you quite a bit. We cut back from about 4 meals out to 2 meals out every week. I do not think this makes us suffer, and we save at least $200 a month.
- Cut out. Lots of us pay for things we do not even use. This is another mistake that gets easier to make with so many automated payment plans. Do you keep a gym membership that you do not use? Replace that with a brisk walk, weights, or a stationary bike. You will not have to make monthly payments, and you may find it is more convenient.
Most of us can find simple things to fix so that our monthly budget stays in the black. Again, it really helps to go over your own personal finances with the help of a budget worksheet every month or so. A few minutes can save you hundreds of dollars.