There’s no doubt that making a family budget will save you money. In the minds of most people making a family budget is about as fun as root canal surgery but this doesn’t have to be the case.
You can create a budget that works for the whole family in less than 30 minutes. It’s wise to do so for many reasons.
• You will save money. Once you know exactly where your money is going, you will be able to see how much money is being wasted and the amount that you could save.
• You won’t stress. Making a budget puts you in charge and in control of your money rather than the other way around. There is nothing more stressful than worrying about whether or not you have enough to last you until the end of the month.
• The ability to reach financial goals. Having figured out how much you spend and by subtracting this from the amount that you earn, you can manage the remaining amount by paying off any debts in a manageable manner.
A common mistake people tend to make is to start saving when they are in debt. Where saving is normally a good thing, it isn’t so wise to do so when you are in debt. It usually makes more sense to pay off your debts with the money that you are saving instead. Don’t forget to prioritise your debts and see which ones will have serious penalties if you don’t pay them.
Creating a budget doesn’t have to reduce your quality of life. There are ways to cut back on your expenses without affecting the things you love. If possible it is wise to consider:
• Re-mortgaging – if your mortgage is likely to be your biggest monthly cost, it is wise to be aware of other possible deals as an option.
• Switching your gas, broadband and phone providers can save you a great amount of money. Many people think that switching is a great hassle but it’s simple.
• Switching car and home insurance is a popular option. Many people nowadays show no loyalty towards this sector, so shopping around for a cheaper quote is a great start for cutting back expenses.
Remember, the advantages are only advantages if, after you have prepared your budget, you stick to it.