Family Budget - Get Back to Budgeting Basics

The fundamentals of the family budget appear to have been largely forgotten in the consumer spend up over the last 15 years or so. During this period most of us were spending 110% of our income -- in effect using our mortgages as an ATM. Reality has hit with the recession and it's time to get back to budgeting basics Family get together ideas in india.

A family budget is basically a list of your proposed expenses and expected income. The objective is to make sure that your expenses or outgoings are lower than your income.

It is important to include all family members in the process when you complete your budget. The kids will learn a basic financial skill and together you can work out ways to reduce expenses. Make it a fun exercise by seeing who comes up with the best ideas. Making your budget a family affair allows each family member the chance to take responsibility for helping achieve goals to reduce expenses.

While each family's budget will be different the purpose remains the same.

o Plan for present and future expenses.

o Prepare for the unexpected.

When setting your family budget you should allow for:

o Emergency funds -- a good guide is to build towards three months worth of income.

o Invest for your future -- often referred to as "pay yourself first".

o Monthly bills.

o Annual bills and not just the ones that get paid each month.

o Saving for specific goals such as education requirements and holidays.

o Entertainment expenses -- be realistic and allow yourself something otherwise your budget is not going to work, but don't go over board.

o Clothing. While we may not spend on clothing every month, when we do the costs can be quite high so allow something each month.

o Charity and donations if this is important to you.

o Savings for Christmas and birthday gifts -- after all they come along each year so you shouldn't be surprised when the occasion arises.

Once you have your family budget down on paper or on your computer you will have a better idea of how you are financially. Everything will become clearer and you will know what action you need to take to make your family budget work for you. It may be that you need to reduce some spending areas or find ways of increasing income. At least you will know what the problems are and what you need to do to fix them.

Review your family budget regularly as it will save you a lot of heartache and will take the worry out of wondering how you will cope. Get back to budgeting basics and plan for your future.