How do you make a family budget? What are some good places to find information about this?

There are numerous sites that are full of good family budget advice but they tend to assume that you already have the basics in place. If you don’t have a basic family budget here are 6 steps to get you started.

1. Get a notebook with generous writing space, a pencil, and an eraser.
2. Write at the top how much money you have in hand and or in your bank account.
3. Next, write down how much cash you expect or know will come in over the following month.
4. Then, gather all your monthly bills, like utilities and mortgage payments. Next, estimate your other weekly expenses, like gas, food, daycare and so on.
5. Do the math. If you’re spending more than you’re making, you’re budget is in the red and you will accumulate more debt unless you make changes. Figure out what expenses you can reduce. Consider adding a line item to your budget to reduce your debt (over and above the minimum payment on your card), quit spending on credit, and eliminate that debt forever.
   6. Do this for the next 12 months. Remember to include any quarterly, semi-annual or annual payments or income, such as income tax refunds and or property taxes. Where you don’t know the exact figures use your best estimate, be conservative.
6. If you struggle to keep your spending within your income then now is the time to look again at every expense. Ask yourself; “Did I use too low an estimate when I budgeted for utility expenses’? Consider making your budgeting easier with “budget billing” offered by most utility companies in which they charge a flat monthly fee which is smoothed over the year. With this you pay a set amount each month. Some months you pay for more or less than your usage, but over a year things will balance out while you have better control over your budget.

Check out my other article on free budgeting software to find out more information on automating process. But you don’t need software to make a simple budget, so don’t wait!