In life there are many things that we have to manage; failing to do so may lead to many ongoing problems. Family Budget is one of these things that we all have to plan and manage to make our lives easy. If you do not draw family budget and you are unaware of your monthly expenses then the chances are very high that you would be tapped in the vicious cycle of debt. And we all are familiar with the stress of repaying the debt. Many wise people draw their monthly budget to see how much they would need to meet their monthly expenses. This way they get a chance to see both, their income and expenses.
Just knowing the amount of money you earn is not enough, you need to also know about your monthly expenses. This way you can limit your expenses so that you don’t have to depend upon loans. If you are a person who is having difficulty in paying the monthly payments then its time to start learning some of the basics of creating your family budget. The most important thing for any family budget to work out is that your salary must be more than your monthly income. This is the only way things would workout for you.
People find it so easy to break this rule. Once you break this rule you would have to borrow money, and if you keep applying the same strategy over and over again you would have to face many long-term problems.
It’s quite true that your household expenses and income should balance but this plan would only work if you would work for ever. Defiantly you would have to save money for your future too; there is no way you can work once you get to 70’s or 80’s. So always keep a small amount of your income aside. And keep in mind that it can not be spend whatsoever.
Once you have kept certain amount of your income aside, you need to create a family budget for you. You would have to divide your family budget into three different parts: income/ total salary, mandatory expenses, and discretionary expenses.
MONTHLY INCOME: we all know where our income has to come from. Many people have more then one source of income. If you have other sources like paychecks, interest income, tax refunds or any other passive source of income then collect money from all the sides. So any reliable source of income should be included in the total income section of your budget.
MANDATORY EXPENSES: Once you have your income on hand and you have counted it, come to step two. We all have some expenses that we can not in any case run away from; these expenses are known as mandatory expenses that include items like mortgage payment, car loans or debt repayment, and property taxes. There are other necessary expenses like grocery bills and energy bills.
DISCRETIONARY EXPENSES: Decisions start to become difficult once you reach the discretionary expenses portion of your budget. This is the time where you really need to think whether you should spend money on a particular item or not. For example you may want to go out and match a movie or go for eating out on restaurants. So you really need to think if you want to save money. Since you already have kept some amount as savings so there is no worry if you go out once in two weeks to eat out. You can do whatever you want but keep in mind that the more you would save today, it would help you a lot in future.