Keeping a family running is about more than just shuttling the kids to soccer or ballet practice. It's also about making sure the finances are running smoothly. If you have problems keeping up with family expenses and knowing where all your money's going, it might be time to use two main family budget tools to help you get control of your finances.
Budgeting Software
Paper and pen are easy to use, but budgeting software can make it easy to track your expenses over a longer period of time. You can find basic budget software programs online for free. These tools will help you enter in your basic expenses, monthly income and discretionary spending, and help you come up with a plan to target your money where it's need most. Other software programs are available for sale that save monthly results on your computer, allowing you to compare your results month-to-month and also help you out at tax time. Whatever you choose, using budgeting software may take some time to get the hang of, but once you do, you'll likely find it easier to prepare your budget every month.
Cash Envelopes
If you sit down at the end of the month and wonder where all your money went, an envelope system might be the answer for you. The concept of the envelop system is easy to understand, but may be hard to pull off. Instead of pulling out your debit or credit card to pay for groceries or other items at the store, using cash may help you spend less, according to financial counselor Dave Ramsey. At the beginning of the month, putting cash in a series of envelopes based on categories---food, clothing, entertainment and so on---and making a firm commitment not to withdraw any more until the next month, forces you to only spend what you've budgeted.
Making Budget Work For You
No one is going to force you to do a budget every month. That's up to you. The basic concept of budgeting is to make it so you're spending less than you make. Any extra money left over at the end of the month is used to pay off debt, put into savings or pay for upcoming expenses, such as that new furnace you've been needing. Using the two main budgeting tools only works when you have the discipline to follow through with them. Commiting to use cash and then going to the ATM at the middle of the month will only backfire on you, says Ramsey. Commit to using your budget tools to help yourself straighten out your finances and make your money start working for you, rather than the other way around.
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