Guest post courtesy of Think Money
When it comes to managing your family finances, it's important to have a stable foundation… and a stable foundation can only come from a stable budget.
So, how could you create a stable family budget? Well, we're going to have a quick look at just one of the ways you could create your very own budget now.
Creating your family budget
Your budget should start with you understanding exactly how much money comes into your family's household every month, and where it all goes.
You'll need to write down your monthly income - which includes everything your family earns/receives (including salaries, benefits and grants).
Once you've got this noted down, you'll need to move on to your essential expenditure. This includes your priority debts (mortgage/rent, utility bills, etc.) and your everyday living costs (food, clothing, etc.).
Do not, at this stage, write down the monthly cost of repaying your unsecured debts (credit cards, loans, overdrafts, etc.).
You'll now have two totals in front of you. From here, simply subtract your family's monthly expenditure from your family's monthly income - this will leave you with your disposable income.
What's your disposable income?
In simple terms, your disposable income is the money you've got at your 'disposal' each month to spend on your unsecured debts and (if you've got any after doing this) saving and non-essential purchases.
Once you know how much disposable income you'll be left with each month, you need to figure out if it will be enough to cover the cost of servicing your debts.
If it isn't, you need to take action as soon as you can. The solution to your problem will depend on your situation, but you could seek some debt advice to find out what sort of path you could/should take out of debt. Alternatively, if you'd like to read more about dealing with any debts you may have, this page has some great guides on debt topics.
If your disposable income is enough, you could save yourself some money in interest in the long run if you can afford to pay more than the required amount each month. So, once you've made your required payments each month, rather than spending the money left over on non-essential purchases, why not put this towards overpaying your debts? Just make sure you understand if you'll get any 'early repayment charges' before you do this.
There you have it then, your guide to creating a stable family budget. The rest (sticking to it) is up to you!
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