Developing and maintaining a budget is a FAMILY AFFAIR. If you are married, you must work together. If you have children, this is the proper time to teach them how to operate within their means.
To make a budget work, there are some things that must be attended to prior to spending.
Together you should:
- Decide on needed items and plan how much can be spent before going shopping.
- Always use a shopping list that has been approved by both spouses.
- Buy only the planned items.
- Compare prices and quality before buying.
- Use credit only when necessary for necessary items.
- Do not use credit for items that are not realistically needed.
- Decide together on a vacation spending
- Encourage each other of the benefits of saving
- Make realistic goals of being debt free
- Start gift shopping early and stay within a prescribed means
- Don’t over spend just to make someone in the family feel good.
- Decide how much to save on a regular basis.
Set down together and discuss the family budget and include in the discussion the benefits of becoming debt free for the future.
The following provides a simple method of how to establish a budget.
- Go through your checkbook and/or bills for the last twelve months to determine your past expences to create a budget..
- Think about your hobbies and other activities you may enjoy and add these to your budget catagories.
- Go through your bank statements and/or pay stubs to calculate your monthly income. Enter this into your budget.
- Include all other income such as interest income, dividends, bonuses, or other forms of income you may have.
- For each expense category, establish a budget amount that realistically reflects your actual expenses for the coming months. Put these at levels where it will enable you to save money.
- Keep track of all expenses throughout the month and track these in your budget.
- Subtotal all the income and expense categories including the monthly mortgage and notes you have.
- Subtract the expenditures from the income to arrive at a net income.
- If the net is negative, your expenses are greater than your income. You must change your spending habits to reduce your expenses.
- If the net is positive, transfer as much as possible to a savings or investment account at the end of the month. Do not leave extra money in your checking account because it is too easy to spend it.
- After you have tracked your actual spending and actual income for at least a three months, you can easily see your spending habits and identify where you can make cuts or start paying off debt.
- Once you are comfortable with the budget process, take an in-depth look at the overall budget. Locate your largest spending category, discuss how to reduce debt by reducing your spending habits. Plan for specified savings.
- Up-date your budget of income and expenses on a monthly basis.
A budget cannot be maintained without the cooperation of all family members. One member of the family cannot keep information from another. Working together provide a spirit of unity in the home and helps control what happens in the area of finances.
You can learn more about the importance of tithing & giving at http://www.pastoralhelps.com/where-your-treasure-is/
Aubrey L. Jayroe is an Accredited Tax Advisor; Accredited Tax Preparer; Licensed to Practice before the Internal Revenue Service; Certified Tax Return Preparer
For 40 years, Jayroe & Company has been providing quality, personalized financial guidance to churches, local individuals and businesses. Jayroe & Company’s expertise ranges from basic tax management and recordkeeping services to more in-depth services such as reviews, financial statements, and financial planning.
