If you have just been married and getting settled in to your new life, then it will help you immensely to get started right. So many couples have found out the hard way that starting off on the wrong foot financially is not worth it in the long run. Creating a family budget from the start is a great way to control the money flow and save money. Here are some basic tips on how to create the budget you need.
Put in Monthly Expenses
Making a household budget requires that you start with the essential expenses. This includes payments that you make monthly, such as your utilities, car payment, rent or house payment, etc. Then add in the quarterly or semi-annual payments, but divide them by the number of months in between and enter that number in for each month.
Eliminate Unnecessary Expenses
The next step is to add in all expenses that you have every month. If you have not previously kept any kind of record, you will need to do so for about a month, to determine exactly where all the money is going. Most likely, after you look at this list and add it all up by category or expense, such as lattés, videos, eating out, etc, you will be surprised how much is going to waste.
Finding more money to be able to put into savings will most likely come from these items. If you want to save money in a bigger way – and faster – then you will need to cut down on these superfluous expenses. This can include many money saving ideas such as get a simpler cable TV plan, getting videos from your public library, eat at home more often, look for low cost fun activities, etc. Think about the future and it will make it a little easier to part with some of these extras.
Designate an Amount for Savings
If you are serious about saving money and putting more in the bank each month, then it will be necessary to designate a specific amount to go into some form of savings account. Ideally, you want the money to be directly deposited into your savings account if possible. This way you will not be tempted to spend it on something else.
You may also want to subdivide this money up into various accounts. These can include some long range goals (such as buying a house, new car, retirement, etc.), and some short range goals (such as electronics, a new suit, a vacation, Christmas, etc.)
Add in Inflation and Extras
Personal finances can be managed more accurately if you build a little leeway into your family budget. You do not want to account for every penny because unforeseen expenses will occur sooner or later. You need to add into it an inflation rate of about 5 to 8% per year. If one year does not see this much inflation then put the difference into your savings accounts and start earning interest on it.
Also, add in a little bit for some fun things. When the children come along, you will want to have some extra money to do some things together with them – or just go out together for a date. Better money management using a family budget leads to greater savings.