Planning a Family Budget That Works

2006-05-18

What is the number 1 reason people fail financially? They fail to plan - realistically. We've all done it, we know we should fill out a family budget. The problem is we don't stick with it because we aren't honest with ourselves and realistic about our financial situation. Let's explore ways to create a budget that will work.

Put Your Budget In Writing
You absolutely must put your budget in writing if you have any shot at all at sticking to it. By putting it on paper you are making a written commitment to your family and yourself to take charge of your finances. But, writing it down is not enough. You need to post your budget somewhere other than in the bottom drawer of the file cabinet in the back of the closet. You need to display it somewhere that you see it everyday where you are reminded of your commitment.

Track All Your Expenses
For the next two weeks, keep every receipt for every purchase you make everyday no matter how small it is - that $0.89 cent pack of gum to your $50 gas purchase. Log these expenses into a notebook, then add them up after 2 weeks. It will astonish you how much you spend each day without even thinking about it. Once you are aware of your spending habits, start looking for ways to cutback and eliminate the things you can live without. Depending on your financial situation, you may have to make some very tough choices.

Stay Away From Temptation
Once you see how you've been spending your money, make a conscious effort to stay away from places that tempt you to spend money. That may mean staying away from Starbucks or the mall. I know that sounds hard for you to do but think of it like this - it's not a smart idea for a recovering alcoholic to hang out in a bar. If you are having money problems and you've made the decision to be wise with your money, then it only makes sense to stay clear of temptation.

Give Yourself An Allowance
Now I'm not saying you can spend money. Only you know your financial situation. But, once you are aware of your spending habits, you should set up a limit for yourself and give yourself an allowance. Once it's gone, it's gone. If you spend it all by Tuesday and you don't get paid until Friday tough. You will just have to do without.

Stay Motivated
Stay motivated. Get angry at your debt. Your debt is eating you alive and now is the time to fight back. Break your budget up into small goals, then work towards achieving your goal. By gaining small vicoties over your debt and establishing momentum you can win the battle over your debt.

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