Family budgeting refers to planning for spending a specific amount of money which is your income over a certain period of time for particular purposes. There are many people who hate budgeting because they feel that they are restricted and that distributing their income to their expected expenses and the wanted savings is very difficult if it is not impossible.
In fact, budgeting is more helpful and beneficial for families. It is one of the best ways and may be the only effective way for allowing you to control your financial life and track your expenses. Without budgeting, you will find yourself in a big problem which is wasting your money and borrowing it from others to be finally in debt which is the worst problem that you may face.
There are many things that should be considered while creating a budget as in addition to specifying the expenses, you have also to pay attention to your savings and the debts that you already have should not be forgotten. The budget that you create must be accurate and this can be achieved through using precise data that is always updated such as your actual income and the real expenses that you can estimate. This means that you do not have to follow the budget that you create every month because your income may change and the expenses may be modified from one month to another according to your needs.
In order to make your budget organized, you have to divide it into categories and it differs from one family to another according to their expenses. The categories that can be included in your budget or financial plan are monthly income and monthly expenses that include rent or mortgage, insurance and taxes and these are the two main categories that cannot be excluded. There are also other categories such as utilities, food, transportation, personal care, child care, education, personal insurance, investments, banking, credit, entertainment, miscellaneous and other categories that you can add according to your own circumstances and needs.
How to oblige yourself to stick to your budget
The most important thing is to stick to the plan that you make because if you do not do that, your effort will be wasted for nothing and you will find yourself lost without a financial plan. In order to oblige yourself to stick to your budget, you can follow different budgeting methods such as the Envelope System which is based on distributing your income to different purposes or categories that you included in your budget. The amount of money that is specified for a certain purpose is put in an envelope which means that each purpose will have an envelope of money that is dedicated to being spent on it only. This method will help you to be restricted to the amount of money that you have in each envelope without using the money of other envelopes that is specified for other purposes.
Finally, if you want to encourage yourself to create a budget, think of the future and the necessity to save more money for your future and for securing a better life for your family.
Budgeting is the best way to know where your money suddenly goes