Planning Your Family Budget

In these challenging economic times we all need to watch every dollar. The best way to do that is have a household budget. Budgeting helps ensure you're not overspending and that you're making the best use of the money that comes into your home. Budgeting also helps you plan for major financial goals.

To start creating your household budget, add up all your income for the month. Include dependable sources of income only, including alimony or child support. Total the household expenses; include everything you spend money on such as groceries, transportation, entertainment, rent/mortgage, etc. Don't forget to include irregular and variable expenses. These are those expenses that aren't due every month, like insurance premiums and property taxes. You should continue to include these in your monthly budget and set aside the money for expense so when it's time to pay you don't have to break the bank to cover it. If it's a semi-annual expense (due every 6 months), divide the total amount due by 6 and write that into your monthly budget. Or, if it's an annual expense divide by 12.

An important part of your family's budget is putting money aside for the future. Not only should you save and establish an emergency fund, you should also save for retirement, college tuition, and even the annual family vacation. As a rule of thumb, a single person should have the equivalent of three months’ worth of essential expenses set aside. For people who are providing for others, six months’ worth of expenses is recommended. Experts also agree that you are more likely to contribute to savings if you include it in your family budget planning.

For the first few months you will need to track your spending closely to make sure your budget is legitimate. If you go over in some areas, make sure you included enough money in your budget for that area. Otherwise, be more cautious the next month to make sure you don’t overspend in that area. If you notice that you’ve overspent in one area, you’ll need to cut back in another area to keep from spending too much. Updating your budget helps make sure you continue to make the best use of the household's income by planning appropriately for your future expenses. Budgeting may seem like a daunting task at first, but once you get going you will wonder how you got by without it.

San Diego County Credit Union offers a free MoneyTracker service to assist in setting up and maintaining a budget. For more tips visit sdccu.com, stop by one of our 28 branch locations or call toll-free, 1-877-732-2848.