How to Create a Family Budget

How to Create a Family Budget

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Every new family has one same problem: budgeting. Keeping up with your own expenses was hard enough, but now you need to learn how to do it for two.

Any human needs to know how to go with money, and if you are struggling with it as a family, this article is for you!

Define your family budget

There are three ways how you can make your family budget:

  1. All the money spouses bring home are joint income
  2. Both have separate incomes. All expenses are divided equally (50/50) between spouses
  3. Both have separate incomes, but expenses are divided proportionally depending upon each spouse’s income

You should choose the one that fits your family. There is no right or wrong, only what suits your particular lifestyle.

Calculate your expenses

When you both decide which budgeting style works for you, it is time to gather information about your expenses. You need to carefully consider everything from an everyday cup of coffee to alimonies if one of you has to pay them.

Firstly define your necessities like rent or mortgage, housing, food, car, gas, day-care, insurance, work expenses, phone, internet, taxes, etc.

All of them should be a somewhat stable sum that you need to spend every month. It is also helpful to have a small emergency fund if some of those expenses will cost more this month (like food or gas).

The second part of your budget should be for variable but important expenses like clothes, home goods, self-care (hair appointments, gym memberships, etc.), travels, and entertainment.

You probably will have some months without spending money on new clothes or a hairstylist. But, including these expenses in your budget at the start of every month is very important.

The third part of your budget must be savings. Even if you have a low income, save as much as you can. Creating a safety net that will catch you in a time of sorrow is more important than most of your unnecessary expenses. So, if you still haven't started saving, this is your chance to begin!

The fourth part of your budget should be money on hobbies. You are a human being, and you need to have some things to spend your spare time on. That’s why you can and should dedicate a small amount of your income to your favorite things.

The last part of your budget should be unnecessary expenses. You can include your morning Starbucks or any prepaid services here.

We recommend you leave some money for these expenses because it will be so much easier for you to stay within a budget if you allow yourself to have a small weakness.

Stay on track!

When you have a budget, you need to follow it 99% of the time. The easiest way to do it is to write down all your expenses.

You need to do it for only a couple of months to find out what you do right and wrong to improve your score. Good luck and happy budgeting!

For more assistance head to therealestateuno.com.

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