Family Budgeting Part 3

Here’s another important tip to keep in mind when building your budget.

Avoid using estimates whenever possible.

For example, let’s say that I think I spend about $100 a month on groceries. But, if I was to pull out my checkbook, credit card statements and receipts, I would know that I actually spend $800 a  month. If I was to build my budget based on my “gut feel” or what I think, I am going to be way off. And what is the result of such a big miscalculation? Well, it may mean that I spend too much in another area and then find I don’t have enough to pay for food that month. Some of you may have even found yourself in this exact situation which can be very scary and frustrating.

I know it isn’t fun to gather up all of your exact expenses for an entire year. However, the extra effort is going to pay off in the end because you are going to have a much clearer picture of where your money is being spent. In turn, this knowledge is going to help you to make better financial decisions and good decisions are what will put you onto the path of financial freedom!

Family Budgeting Part 2

So, how did you do on your list of expenses? Did you get everything?

I realize your instinct may be to exclude certain things because “they don’t count.” (That’s how I always feel when I list how much I spend on clothes. Yikes!) However, you are only hurting yourself if you do this. In order to figure out how to get out of a debt situation, you need an accurate and realistic picture of where your money is spent. If you leave things out you will get frustrated in the end when you are still spending more than you make.

Here are a few more items that I forgot to include that you’ll want to put in your list.

• All outstanding loans including second mortgages, home loans, tuition loans, loans to family members, etc.
• Trash Removal
• Home Maintenance (painting, furnance filters, salt, etc.)
• Furniture and Decorations
• Life Insurance
• Disability Insurance
• Veterinarian
• Pet Food & Toys
• Attorney Fees
• Child Support
• Payments on Liens or Judgements
• Dry Cleaners
• More Supplies (Detergent, Fabric Softener, Stain Remover)
• Charities and Donations
• Postage
• Health Club
• Child Care

Please feel free to share any other expenses I may have left out. 

 

Until next time!