We are just about halfway through the year which is a perfect time of year to review your budget. If you aren’t following a budget it is a perfect time to create one!
I grew up and attended college and learned the skills needed to earn a living, but I was never required to take even one class on how to manage my money! I never learned, based on my level of income, how much I could afford to spend on housing, food, transportation, insurance etc. Instead my husband and I learned through trial and error, mostly error! I read numerous books and finally learned how to create a budget.
A budget is a written plan to determine how the income will be allocated in a proper balance to meet all the needs and goals.
It’s never too late to start living on a budget. Creating a budget really isn’t that hard and you don’t need to make it hard. Your first step is figuring out just how much money is coming in each month. Add in all sources of income, this could be salary, gifts, interest or tax refunds.
The next step is to figure out what you need to live on each month. Go through your checkbook and figure out all of your fixed expenses such as utilities, mortgage or rent, insurance, auto/transportation and groceries. Determine what you owe as well for credit cards, loans, etc.
By adding up your total income and subtracting your expenses this will give you an idea as to where you stand. Ideally you want the income to be greater than the expenses!
Once you have the big picture down on paper you can take a hard look at where your money is going and areas of spending where you can cut back.
There are many books and online resources to help you have a balanced budget. One of the best books I’ve read recently on the subject is called The Money Saving Mom’s Budget.
It is well written and easy to read and understand. If you’ve been putting off creating a budget this book may give you the encouragement you need. One of the best suggestions the author gives is that if you are new to budgeting give yourself time to work out a full-fledged budget. Start first with a single area of spending – a food budget, this will help you to shift your habits. You’ll see changes there which will help you to move on toward developing a full budget for your family.
Linked to: LearningTheFrugalLife , TheThriftyHome, WeAreThatFamily, FeminineAdventure
Nancy on the Home Front 