As an unmarried mom, going about life, budgeting can be tough.
When you first start taking responsibility for your finances, with the intention of living within your means, it can all be a little overwhelming. Merely seeing the facts written down can take your breath away. The realization that you spend half a weeks salary on coffee can be daunting. But, it can also be a kick in the right direction. If you’ve got a family, things can seem much more complicated.
When you’ve got kids, a mortgage and things like car insurance and personal pensions to worry about, the bulk of your spending isn’t frivolous. There aren’t necessarily easy cuts to be made, your priorities are different, and you might have given up those trips to coffee shops a long time ago. But, that doesn’t mean that you shouldn’t do it. Having a thorough family budget can help you to manage your finances, avoid debt and even save for life’s luxuries.
Understand Your Finances
The first step toward creating a budget is often the hardest. Before you begin to think about making things better, you need to understand where you are. Sit down with your bills, bank statements, credit card statements and any other financial documents that you’ve got. Look at what you owe, what you earn, and where your money is going each week. Write a list of your income and outgoings, and then build a simple budgeting spreadsheet and input the data.
Manage Your Debts
For many families, debt is a constant worry. Bills stack up, debt repayments cut through income, and there is very little left. Most of us get into debt at some point or other. But, then we fail to manage them. We set up a direct debit to pay off the minimums without worrying about what this could be costing us.
If you’ve got multiple debts, and you are only paying the minimums, you could be losing a fortune, much more than the original debt in fact, in interest. Apply for a bill consolidation loan, and start paying off more than the minimum payments as soon as you are able. Start managing your debts, instead of letting them manage you.
Be Realistic
One mistake many people make when budgeting is underestimating how much they actually spend or overestimating how much they can cut back. Set yourself a budget for weekly expenses like food shopping and fuel. But, be realistic. Don’t assume that you can slash your bills in half. You’ll end up overspending, making your budget pointless. It’s also a good idea to allocate money each week for luxuries or unplanned expenses. They happen, there’s no way to avoid them.
Keep it Simple
Over complicating things sets you up to fail. Keep your budget straightforward with a simple spreadsheet, and remind yourself to fill it in when you need to make changes.
Set Your Goals
Most of us start budgeting more carefully with an ultimate goal in mind. It’s often to save up for something specific, to pay off debts or to improve the state of your finances. Be clear about what your goals are, and make sure your budgeting is helping you to reach them.
