Create A Family Budget & Improve Your Finances In 2022

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You can create a family budget and easily track where your money is going so you can cut back or pay off debt where you need it most.

Creating a family budget doesn’t have to be complicated. There are plenty of resources that can help you get started on budgeting and make it less difficult.

Let us show you how to create a family budget today and better manage your money for tomorrow.

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What Exactly Is A Family Budget?

A family budget is an essential tool for success so you can stop living paycheck to paycheck and put more money towards a brighter future.

A family budget is a tool that helps families carefully plan and manage their family finances.

Many families use a family budget to make sure they have enough money each month and live frugally within their means.

It typically consists of a summary of all incoming and outgoing money, including income from employment and investments, plus expenses like housing, food, transportation, and taxes.

6 Steps To Create Your Family Budget

Ultimately, creating family budgets gives you the power to take control of your financial life and make smart choices about spending money, saving moneyand growing your income.

Creating a family budget can be an effective way to manage your family’s finances and ensure the security of your financial future, so be sure to include the whole family!

Take the time to sit down with all household members and make this road map for your family to get a clear picture of where your income is going every month.

1. Review Your Past Spending

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The first step to creating a realistic, effective budget is to review your past spending habits.

Look at bank statements and credit card statements over the past few months to better understand your spending habits and get a feel for where your money has been going.

Connecting your bank and credit cards in one place, like Personal Capital or mint, can help you better track spending and make budgeting much quicker.

2. Pick Your Budget Categories

Reviewing your statements may cause you to notice patterns, like how often you eat out or how much you spend on clothes versus groceries.

Now you can use those patterns to pick categories in your new budget. The categories you choose will largely depend on your financial goals and priorities.

For example, if you are trying to pay off debt or build an emergency fund, you may want to focus on debt repayment or saving more money each month.

On the other hand, if you are trying to build your college savings account, retirement savings, or plan a big purchase soon, you may want to set aside more cash for those spending categories.

3. Estimate Your Expenses

You know your categories and how much you’ve spent in the past- now you need to estimate your expenses for the future using that info!

When estimating your new monthly expenses, you need to include your fixed expenses, like what you’re paying for your rent or mortgage, plus your variable expenses, like groceries, child care, and utility bills.

It’s also important to factor in paying for unexpected expenses, like car repairs or medical bills.

By estimating your monthly expenses, you’ll be able to create a more accurate budget every month and ensure that you have enough to cover all of your costs.

You also want to remember certain expenses may occur less often, but can’t be forgotten, like insurance, taxes, or annual membership dues.

This is an estimation, meaning things can change as more expenses pop up OR because your income limits your spending.

For example, if you get a raise at work, you may be able to increase your savings or put money towards your family vacation fund.

But if you lose your job, you may need to prioritize new income to keep doing the basics of `paying off debt and paying the mortgage.

Your expenses will change, but for now, figure out some basics to put in a budget; then, let’s talk about your cash flow.

4. Check Your Current Income

Lastly, once you’ve checked out your past spending and estimated your expenses, you need to know your family’s income.

Knowing how much income you earn will give you a better idea if you can afford what you’ve estimated and still set money aside for the future.

To get an accurate sense of your income, be sure to include all sources, including paycheck earnings, tips, commissions, and any passive income streams like rentals or investments.

5. Subtract & Review Your Budget

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To get a clear picture of your financial situation and finalize that budget, you must calculate your income minus expenses.

This step will tell you whether you will have money left at the end of the month or if you’re in the red with not enough money to cover your estimated bills.

If you’re overspending, this is a clear sign that you need to make some adjustments and find out where to stop spending money.

If you have extra money left at the end of the month, this can be an excellent opportunity to invest your funds and earn more money. Robinhood and Betterment are great places for beginners to invest in stocks or retirement.

We also recommend creating a zero-based budget so that you never forget to save or invest money.

With a zero-based budget, each dollar you earn has a purpose, like starting an emergency fund and investing for retirement. No money is left because every dollar gets set aside for something in particular.

6. Repeat & Stick With Your Budget

You may need to adjust your categories from time to time as your income or other expenses change, but actually using your budget is where people fall flat!

Once you create your budget, stick with it and stay on the same page with your family.

Sticking to it may mean making small sacrifices, such as giving up your daily latte or skipping the occasional movie night to save money and meet more family goals. Still, committing to the budget changes your life, I promise!

If you commit to staying within your budget, you’ll find that it becomes easier over time, and you can still enjoy yourself plenty. There are fun, free things to do!

Apps For Saving Money & Budgeting

Budgeting can be challenging, but it is possible to make your money work for you with the right strategies and tools.

Here are a few apps that can make budgeting and saving money easier:

  1. Use Capital One Shopping to find out if a better deal is available. Capital One Shopping is a free browser extension that can help you find incredible deals at huge savings when shopping online.
  2. Get more coupons using Honey. When shopping online, use Honey to automatically find coupons or promo codes available, so you don’t pay full price.
  3. Install the Truebill app and start saving on bills. You can also use Truebill to find subscriptions you’re no longer using and canceling them to save money and negotiate better rates for your bills.
  4. Sign up for Trim to reduce your bills. Trim is a free app that assists with budgeting and saving money, plus it provides personalized recommendations on how you can save money.

Try Budgeting Apps

Portrait of happy young woman with mobile phone sitting on couch at home

Money management apps can be a great way to manage your money, keep track of your expenses, and stay within your budget.

Here are the 2 apps we use to check on our money and keep our budget afloat:

Personal Capital

Personal Capital is an excellent option for people who want to handle their finances better and start saving money, even when they’re always on the go.

Personal Capital is a free app that links to users’ bank account information and credit cards and provides a real-time overview of their finances.

It also offers tools for budgeting and goal-setting and allows users to track their progress over time and plan around big purchases.

Mint

Mint is another free app that can help you see your spending and stay on top of your financial situation.

The app syncs with your bank account and credit cards to see all of your transactions in one place, plus you can set up family budgets and bill reminders.

Mint can help you save money by identifying areas where you spend too much. For example, the app can show you where you pay out the most money on groceries or gas.

Budgeting Templates Or Spreadsheets

Budget plans and printables allow you to quickly make a detailed budget that considers your different expenses, debt, and sources of income.

If you’re not sold on the tech side of budgeting, you can use a trusty pen and paper to get your budget done. Or better yet, use some premade templates so you can just write in some numbers.

If you like the tech side but don’t want your info in an app, you can also create a spreadsheet to use month to month easily.

Savvy Free Budget Template

Savvy Couple budget template

Savvy’s Budget Template is an excellent option for those who want to utilize printable budgets.

The template is free to download, and it’s easy to input your financial information. This way, you can print it and start filling it in right away without having to sync up any programs.

By using a template, you can take control of your finances and better understand where your money is going.

Microsoft Excel Spreadsheet

One of the best tools is a spreadsheet like a Microsoft Excel spreadsheet. These customizable tools help you set up a plan tailored to your own needs and goals.

With a spreadsheet, you can input all of your financial information and see your progress over time. You can also set up various charts and graphs to see your savings, spending, and debt patterns at a glance.

You can also skip the template spreadsheet and easily Make your own Excel spreadsheet from scratch if you want.

Our Thoughts

budgeting

Budgeting is about setting financial goals like saving more each month and then working backward to figure out how to achieve them.

Don’t be afraid to start small- you can always revise your budget as you go along. It’s not set in stone, and you shouldn’t be afraid to make changes as needed.

A budget is just a tool to help you manage your money and help you when you’re struggling with debt.

By following our simple Savvy steps, you can create a family budget that works for you and helps you achieve your financial goals.

So don’t put off your budget- start it today and get money set aside for your goals!

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