One of the hardest things that you will ever have to do as a family is decide on what the budget is going to be and how to take care of all of the things that you need, and still get some of the things that you want. This is one of the reasons why financial difficulties are the leading cause of divorce around the world. Your budget needs to take into account all of the bills that you have, and it needs to be flexible enough that you can adjust whenever changes occur. When the budget is too rigid, you will fell like you are working for nothing, but if the budget is too lax, you will not have the money you need, when you need it. To set your budget, there are several things that you should do.
Biggest Items First
When you set your budget, you should start with the biggest items and work down from there, because these are the items that are going to take the largest part of your budget, and they are usually the most inflexible. These items include things like your mortgage and car payments. Because these items are so inflexible, there is not much that you can do with this part of your budget.
List All Small Items
Small expenditures are sometimes easy to forget about, but they are an important part of your budget and you need to make sure that they get listed. Once you have taken care of the biggest items, list everything else that you spend money on during the course of the month. Items that you want to especially careful to list are things like daily coffee or lunches that you buy. Over the course of the month, those are large expenditures, and you need to see them on your budget or else it will throw off your calculations.
Once the items have all been listed it is time to analyze what you spend your money on. If you are spending money for both Neflix and Hulu, is there one that you could live without? Do you really need to eat out everyday at lunch, or could you start taking leftovers with you to work? Have you considered purchasing groceries in bulk, so that you can save on the cost of food, one of the biggest items on most budgets? These questions will help you see the things that you need versus the things that you want.
Savings And Fun
The next thing that you need to consider is whether or not you are saving any money in your budget. If you have never saved before, then start small, and you can work your way up to larger and larger amounts later. Ideally you would want to save at least ten percent of your income for emergencies and the larger items that you might want, but that is not always the case. You will need some savings just in case something bad happens, and you do not want that to turn into a catastrophe. At the same time, not all of your money should be budgeted. Leave some of the money set aside so you can do fun things, or else you will begin to suffer mental and emotional strain from overwork.
Make It Annual
Finally, you need to take your monthly budget and do what you can to make it look like an annual budget. The reason for this is that you will need to include all of your annual expenses into your budget at some point. Things like new tires, vehicle inspections and maintenance are not on your monthly budget, but when you start to look at things from an annual perspective, you will be able to see how your annual costs affect your spending.
Making a budget is important and it is something that every household needs to do. With a budget you will have more control over your spending and take control over your finances.
I am Tina Hoffman, and I am a wife and mother. My family has been using our budget to plan ahead for as long as I can remember, so I wrote this article to talk about the importance of a budget. I understand that sometimes the budget will not work, or expenses come up that you cannot plan for and the fast loans Australia based companies offer seem like the only option. There are very few companies that I trust for these loans, and the one that I recommend to my friends and family is Loan Ranger Cash. They are always upfront about their fees and they are some of the most affordable lenders available.