Having money the day before payday, and having money in a saving account is determined by living withing ones means. That is done by proper planning of a family budget. When it comes to planning a family budget, you will find a wide variety of methods.
My dad used a version of the mason jar method. The mason jar method is where every payday you cash your check. Then take all the cash home. Once home you put the cash in various mason jars that are labeled according to the bill that need to be paid.
There were jars for rent, groceries, gas and etc. Any money that was left was what dad spent on entertainment and treats.
Considering today’s technology, the use of old canning jars seems a bit elementary not to mention old fashion. By doing a Google search, you may overwhelmed with all the tools and information to help with planning your finances.
The first step in planning a family budget is knowing the family income. You can never have more money going out than what is coming in. This little fact is gets so many people in trouble. Going to McDonald’s for lunch when there is only enough money for peanut butter and jelly sandwich can create financial troubles.
I like to know what other people in my area are spending. The Economic Policy Instuitute is a good place to start. A family of 3 in Boise Idaho is broken down as follows:
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Boise City-Nampa, ID HUD Metro FMR Area Two Parents, One Child
| Item | Cost |
|---|---|
| Monthly Housing | $660 |
| Monthly Food | $514 |
| Monthly Child Care | $552 |
| Monthly Transportation | $482 |
| Monthly Health Care | $221 |
| Monthly Other Necessities | $282 |
| Monthly Taxes | $215 |
| Monthly Total | $2925 |
| Annual Total | $35095 |
Then comes a time of gathering information. The chances to keeping a family budget decreases dramtically if it is unrealistic for that family. Receipts, and pay stubs will make building a realistic budget much easier.
Then I recommend using an Excel spreadsheet, or Quicken or an online program for entering all the information. Consumer Credit Counseling‘s has a great detailed calculator. The more the detailed helps make the budget more realistic. resulting in better chances of staying in budget.
Credit FYI has a calculator that will help give you a range in what you can spend. Realize these numbers a recommended highs and lows. Some categories will be on the high end others will be on the low end.
In closing, keep good records, keep all family members accountable, and be realistic.
