Making a family budget can be a painstaking task, but done right, budgeting is a tool to help keep families on track to meet their financial goals. If you have no budget in place, plan to work on your budget over the course of a few evenings to avoid taking on too much at once. Learning how to make a budget takes time and energy, so make sure you are giving this task your full attention.
Gather Bills for Household Budget
Get the last statement for all of your utilities and more if you can find them. Many utility companies now offer online statements with several months of bills available online. Accessing as many bills as you can allows you to average the bills over the course of year. Your budget should reflect either the average or the largest bill, depending on your personal budget planning preference.
Next get your credit card and loan statements out. Make calls if needed. When you make a personal budget, you will need as much information as you can find. Find out how much you owe, the interest rate, how much of the monthly payment goes to principal, and what the minimum payment is.
If you keep your receipts, add up your discretionary spending for the past month in categories. Online bank statements are a good source for this information if you do not keep receipts. Determine as best you can how much you spend in discretionary items, such as car repair, clothing, and groceries.
Determine Income for Personal Budget Planning
Use your last pay stub to determine how much you make. With non-salary sources of income, such as child support and interest payments, include only the minimum you know you will receive monthly.
Make Personal Budget With Preliminary Data
Use the numbers you gathered for your expenses and income to create a basic spreadsheet. You can create the spreadsheet using Excel, personal finance software, or old-fashioned pen and paper. Budgeting at this stage is very preliminary. You need to know an estimate of where your money has to go.
In your personal budget planning, subtract the money you must spend first. Food, shelter, and utilities come first, followed by transportation costs, revolving debt payments, and discretionary spending.
Don’t forget savings when making a personal budget! You should decide from your initial numbers how much you can save each month and commit to doing that before you pay your bills.
When you learn how to make a personal budget, you will need to accept changes as needed. Tweaking will be necessary monthly for the first few months until you have a system that works for you. Once you have the basics of budgeting down, then you can make adjustments as needed but otherwise keep your budget intact month-to-month.
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