Personal finance involves making a commitment to researching and maintaining a balance between what you want and what you need. It is not something that has to be done overnight but it can be explored in steps. Here is a general overview to consider as you consider restablishing a budget for your household finances:
- Establish a monthly budget. The budget should include your fixed expenses such as mortgage, property taxes, and home insurance, your variable expenses such as phone, food, and entertainment, and a portion for savings (ex. retirement/children’s college education).
- Determine how you want to track your budget. Some people prefer a written budget so use a large notebook and divide it into sections. Meanwhile, a software package can be used for quick updates.
- Hold a family meeting to discuss the budget. Any issues, concerns, or problems can be addressed. Also, any revisions/updates can be made with each member’s approval. A household budget only works if honesty is provided and this may take time.
- Review your budget monthly, quarterly, and annually. Take into consideration any major changes such as a job loss, birth of a child, or home improvements. It is important to write down all expenses and be ready to make adjustments as needed.
- Keep positive about your budget and allow for an occasional splurge such as a movie since a tight budget may cause you to cheat on your budget.
A budget is a guideline so you can take time to see what works best for you. If you find yourself having more expenses than money. You may need to make cutbacks such as less dining out, entertaining, and travelling. Also, you can work for a specified time and save the money.l