A Perfect Family Budget

After helping people with financial issues they sometimes ask me, what is budgeting, what is monthly budget and how do I set one up?

Typically this is one of the largest budget problem areas.

Many families buy or rent a house they cannot afford.

Housing decisions should be based on need and financial ability, not on internal or external pressure.

Remember this includes all housing costs including taxes, insurance, heat, power, maintenance and improvement expenses.

Many families spend too much for food, others do not have enough.

Shopping at low cost grocery stores and cutting back on restaurants and fast food outlets can really help reduce the amount you spend.

A food budget can be a really tricky area because so many life events involve food and we can be significantly influenced by our entertainment choices.

Changes in a family’s food bill require planning but careful tracking can help you become aware of your spending and shopping habits and help keep costs down.

Families sometimes buy cars they cannot afford.

They trade them in long before their usefulness has expired, and roll unpaid debt from the last car over to the new car.

Changing monthly transportation costs can be important when a person is looking to improve their financial circumstances through a bankruptcy or proposal.

Sometimes a more fuel efficient vehicle or public transportation can significantly reduce your transportation costs.

Also, planning for repairs and general maintenance will ensure you’re not scrambling or turning to credit to cover these costs.

This is the number suggested by most financial planners.

It is an ideal number and somewhat laughable for the person struggling with a heavy debt load. This number should be regarded as something that might be possible in a perfect world.

For the struggling debtor it is an indicator of how steep your financial problem may be.

Although it would be great if family budgets restricted themselves to only 10 percent debt, it is more likely that you need to look at making cost savings in other areas.

But, keeping debt at lower levels in relation to net monthly income is always a good idea.

Many financial planners work in the financial and insurance industries.

They have a strong and healthy bias towards insurance, investments and savings. Sufficient insurance and savings helps protect you when life throws those financial curveballs.

We all understand that these targets would be unattainable for people struggling with the burden of consumer debt.

Debt can be so depressing. People get weighed down by their money problems.

Many people who have financial difficulties actually increase their entertainment expenses in trying to escape the frustration of the stress.

So, we use credit for a vacation, special outing, or for tickets to a concert or sports event.

We know we may not be able to afford it but we long for ourselves and our family to be able to escape from the constant stress of financial limitations.

If you’re looking at your financial budget and wonder how you can save money, entertainment is usually a place where adjustments can be made. For example, there are many free, stress relieving entertainment choices in your community that are suitable for any age.

This is one area along with food that a wise shopper can make an enormous difference.

Proper clothing is important. Shopping sales, discount warehouses, and clothing swaps are just a few of the ways you can still look great while maintaining a balanced budget.