How to plan a family budget for a month and why do you need it?
There is never much money, but little … But let’s not talk about sadness. After all, a person who knows how to manage his money well will never be left in a difficult financial situation. If you haven’t learned the basics of financial literacy, we suggest you start small. Today, elgreloo.com will tell you what a monthly budget is, how to create one and why you need it. If you are tired of borrowing money from friends and living in poverty, this is what you need!
What is a monthly or family budget and why is it needed?
Monthly budget, financial plan, family budget – all these names are united by a single concept. It is about planning the expenses and income of all family members or a person. If you are wondering why to plan a budget for a month, this article is simply necessary for you. By the way, you will also be interested in reading the history of money .
Why make a family budget:
Schedule. Do you have a large purchase in the future? Dreaming of your own home or car? Then you simply can not do without a well-thought-out monthly financial plan. It will help you distribute your money so that it is enough for everything you need.
Where did I spend all my money? If you often ask yourself this question, you just need to keep a family budget and record all your expenses for the current month.
Unforeseen situations happen to everyone, but you can also prepare for them. It is best to do this with a good financial cushion provided by financial planning.
All these advantages completely overshadow one small drawback: you will have to take a few minutes a day to plan your expenses today. In addition, once a month you will have to combine debit and credit, but all this is very easy to do in the Excel table.
How to budget a month? Step-by-step instructions
So, how to make a family budget for a month and what is needed for this? First of all, choose a form in which it will be convenient for you to keep your financial diary. This can be a notebook or a spreadsheet. As we said, you can find ready-made models in Exel. You can also download the mobile budget planning app. Did you choose? Let’s go further!
Step 1. Identify sources of income
First of all, you need to determine how much money you receive per month. Try to take into account all sources of income: salary, bonuses, gifts, part-time jobs, passive income, etc.Write down all this in a separate column of your plan.
Tip: it is worth forming a financial plan for a month only if you have a stable income. Otherwise, you will not be able to accurately calculate your needs and capabilities .
Step 2. Compulsory expenditure
At this point, you need to make a list of expenses that you can not do without. Write down all recurring expenses that you have to pay each month. This may include:
- Housing rent
- Communal payments
- Travel (essence)
- Telecommunications services (Internet, mobile communications, etc.))
- Payment for kindergarten, school, university
The list can be updated according to your needs and expenses. Analyze all your expenses and write them down in the table. Next, write down any expenses that could affect your budget this month and write them down in a separate column. This list includes:
- Entertainment (going to the movies, restaurants, etc.)
- Buy clothes
We have only provided you with approximate lists of expenses, since each family has individual expenses and income and should be able to distribute them. Fill in all the data in the table so that you can track and calculate the amount of expenses. In Excel spreadsheets and mobile apps, expenses can be calculated automatically.
Step 3. Save money
You can set aside some of the money you have left after allocating expenses. To find out how to save money , we are told in our previous article. To do this, you can open a bank account or a separate account. You yourself determine the percentage of the amount you will save on a monthly basis. But it is better to save 10% of your income.
Make it a rule for yourself-first, SAVE money on your salary, and then distribute it in your expenses. At the end of the month, when the money runs out, you will definitely have a “wish list” on which you will have to spend money, and you will not postpone it to a separate account.
Step 4. Analyze
After the budget for the month is ready, you can begin to implement it. Write down all your daily expenses. Write precisely what you spent and how much. At the end of the month, count all your money spent. It is good if the amount is equal to the planned amount or even less than it.
Based on the data obtained, analyze your expenses. Think about where you could save and what you can’t spend at all. After several months of managing a budget like this, you will adjust your expenses and you can set aside a good amount for a holiday or a rainy day. Good luck!