How to Fix Your Family Budget
Analyze Each Budget Line Item to See Where Improvements Can Be Made
Has your household budget gotten out of control? I know ours has! Every now and then you need to step back and really look at your family budget to see if you can improve your financial situation. Sometimes it is obvious, but other times it is really hard to figure out why your budget is out of whack. Here are some tips to help you fix your family budget. When you're done reading, make sure you get our free family budget worksheet.
How to Fix Your Family Budget:
- There are really two sections to your family budget, your income and your expenses. Most of the time there isn't a lot you can do about your income, at least in the short run. In the long run, you can try these tips on how to make money. Meanwhile, you should focus on understanding and lowering your expenses.
- Start by making a budget worksheet with a list of all your monthly and annual expenses, starting with the highest expenses like mortgage, rent and car payments and working your way down to small expenses that you don't think about like haircuts and dining. Try not to miss anything. For a full list, visit our section on household budget items.
- Okay, now that you've got everything listed convert everything to a monthly expense. For example, divide any annual expenses by 12. Now total up all your monthly family budget expenses on your worksheet.
- Now subtract your monthly expenses from your monthly income (income minus taxes and other withholdings) to find out how much monthly savings you have left each month. This works great on our free budget worksheet template. Most likely your number is too high because you've underestimated your expenses (like 90% of us do). Revisit your expenses and try to make more realistic estimates.
- When you get to a number that you believe, there is a good chance that it is negative. If so, you need to find a way to fix the number so that you can start saving money.
- To fix your family budget, you need to make changes to your expenses going forward. Use our list of budget expenses to go over each expense and see if you can lower them with our suggestions. Also, visit our section on ways to save money for more ideas to improve your family budget worksheet.
See Also: Household Budget Help