Preparing a Budget to Organize Your Finances

bulram | August 13, 2013

Budget

One of the best ways to set you up for financial success is to learn to use and live with a budget. Budgeting is a method of organizing your income versus your outgoing expenses. The effectiveness of your budget starts with the goals you set for money management and the future. The first place to start is setting those goals for your family. This will focus your budget and the planning stages. Having a realistic understanding of your expectations will prepare your for how you need to spend your income and what extra?s you can eliminate.

Goals & Expectations

Perhaps you are trying to get by in tough financial times or you have children who think you are a breathing ATM or maybe you are trying to figure out who to pay while on a fixed income? Whatever you?re circumstances, a budget with set goals will benefit your financial future. The first step of budgeting is to set reasonable goals and expectations of your family. Start with an open discussion among your family members. Allow everyone to ask questions and state what their expectations are. Are you saving for a new car or house? Maybe you want to take a special family vacation? Use these hopes and dreams to build this goal. Then follow up with defining and creating a family goal for your budget.

Income

The next step in your budget is to define all income that will build the family budget. Outline anyone in the family that is bringing in money, or are there other incomes expected. When do paychecks come in? Are you expecting stock dividends, child support, alimony, or any other type of profit that you need to include in the income section of your budget? Include a column for the amount and date of income. When all income is clarified, then you will want to total this and place it at the top of your expenditures column.

Expenditures

The expenditures are the amount of money that you spend on bills, mortgage, rent, insurance, groceries, and miscellaneous expenses. Through the organization of these costs, you will see what is most important and what can be trimmed or eliminated. Start with your housing, then your household bills, car payment, and keep listing debts in order of importance. Do not forget the charges of student loans, credit cards and a slot for unexpected expenses. This way when the hot water heater explodes or the engine on your car dies unexpectedly you will have some money set aside.

Savings

This leads us right to savings. No Matter what happens, you will start putting money aside in a savings account. Most people start with as little as 5% in the beginning. This starts the habit of saving a bit of money all along. Talk to your bank and discussion a savings account that will allow you to gain interest on your money. You might want to set up separate savings accounts for your different goals such as vacation, emergency repairs, retirement, or new house.

Programs & Apps

There are many programs out there that will help you organize your budget; MS Money, Quicken, Excel, Daily Home Planner and more. To decide which you will use, you need to try them out, read reviews, and test what you can. Make a list of functions you want, and go shopping. Ask experts, accountants, and friends to find out what works for them. Another way to help your budgeting is through the use of couponing and grocery store apps. These programs for your phone and tablets will help you track your spending, organize coupons, and understand what expenses cost the most.