Family Financial Planning Part 7

The weekend is here! YEAH! I hope you have enjoyed this series on family budget planning. So, in this post let's take a look at some guidelines that will help identify estimates in on-going expenses that sometimes get overlooked in building a family budget. Guidelines that will help you are and could be used as an exercise to get you started:

 Monthly bills that stay the same – car and rental payments

 Monthly bills that change – utilities, phones and more. Find costs per month for say six months, add them up. Take this number you have calculated and divide it by six (the amount of months) to get your average cost. This is the number you will be using for your budgetary exercise.

 Bills that come every three or six months – the number for every month will be used in your budgetary process.

 Bills that come annually, meaning once a year – divide the amount by 12 months. The answer is your monthly budget number.

 Bills that come more than once a month – food, gas, lunch and family fun. This is a category to watch very closely, as it is a contributor to this “bottomless pit”, we sometimes feel and see our cash disappear into.

 Unexpected expenditures or surprise bills – what you can afford to set aside as a buffer or emergency, contingency fund - (look at the last three years or so and see what kind of unexpected expenses you and your family faced). Use an estimate that makes sense to you and divide the annual number by twelve months to get your monthly number.

 Finding out if monthly expenses match monthly take-home pay

Compare your total expenses with your take-home pay. A couple of results and areas could be staring you in the face and causing out of control spending:

Positive outcome: Income could be more than your expenses – you can either spend or save the difference!

Negative outcome: Expenses are more than your income – spending more than you have, you might have to cut costs and try to save some money to cover the bases that are not in line with your immediate goals!

Whichever of these outcomes you are faced with, knowing is better than not knowing. Staying blind to your spending challenges will keep you and your family broke and unable to plan for a better future. For some you, getting a grip now might bring little comfort and relief, but people in general want to know they can make it and find this exercise useful to make their lives more enjoyable, less stressed and able to have fun. Building a budget makes us accountable and wanting to act, faster and that sense of urgency and momentum is just what the family budget process needs to be! Take this and run with it! Your life will be better, I promise! :)

Enjoy your weekend!