Wants and needs are two different essentials and it is important to always put your needs ahead of your wants and then save for the items you desire.

Start by setting up shop and organizing an area that can be used solely for your budget planning. Get your bills out and categorize into house bills, car loans and credit cards bills. This will give you an idea of what your monthly bills are and where your money is going.

If after you have sorted through your bills you find that you have more than your fair share of credit card debt or have more than three cards on hand, it is time to eliminate this debt. Pay off existing credit cards and start paying with cash. Not only will this stop your credit card bills from rising, it will also help to show you what you are spending your money on and if it is really needed. Chances are that if you have to pay cash you will think about each purchase carefully. This is easier said than done, but over time you will get better and better at it.

If you do not currently have a savings account, open one. This will secure funds for any emergency that may arise in the future, and again, having this money set aside will mean that you are using cash and not increasing your credit card debt.

Needs are the everyday tools that are necessary to run your household. A place to live, a car to drive (depending on your area) and utilities are all necessities. Food and cleaning products are necessities as well. Be sure that you are purchasing these items first as they are your priorities.

Wants refer to every other thing that does not pertain to your quality of life. A television and cable are not essential to your wellbeing, no matter how much entertainment they may provide. A computer may not be necessary and neither are the other technological advances that are readily available.

By distinguishing between wants and needs, you are better able to determine how much money you can spend each month. If it does not pertain to your wellbeing, then it is not a necessity and need not be part of your household budget. Wants should only be fulfilled after your needs have been taken care of.

Originating post: Setting up a Budget: How to Differentiate between Wants & Needs

Setting up a Budget: How to Differentiate between Wants & Needs is a post from: The Family Wallet.

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In an ideal family budget situation, the family would get together on a regular basis to plan the next budget cycle. Monthly meetings and budgets work wonderfully. At these meetings family members can discuss their anticipated needs for the next month, their projected income, and any concerns. Although everyone may not be able to work their desires into the budget, everyone will be able to share in the decision-making process.

Family budgets work much better than budgets prepared by one person for two different reasons. Firstly, the old adage that two heads are better than one is true. In fact, three or four heads are even better. If responsibility for the budget falls onto one person’s shoulders, he may forget to plan for irregular expenses like semi-annual insurance premiums, school supplies, or lawn care. By gathering the entire family together to create the budget, the family stands a better chance of not allowing anything to fall through the cracks.

Family budgets also work well because the entire family is vested in these types of budgets. In households where the budget is dictated to most of the family, each member may resent having all of their spending decisions made by someone else. However, by working through the kinks of the budget as a family, each member of the family will know that his concerns and needs were considered during the creation of the budget.

The process of creating a family budget can, of course, be tweaked to fit each individual family. Families with very young children may prefer to leave them out of the monthly budget process. In these cases, the adults will simply handle the finances themselves. However, as the kids age, they should be integrated into the process as they become old enough o understand what is going on.

Originating post: Start the New Year with a Family Budget

Start the New Year with a Family Budget is a post from: The Family Wallet.

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Start by determining what your income is. For most people, this task is as easy as taking a look at your pay stub. Self-employed people however will need to work a little harder at estimating their income. Looking at the previous year’s tax return is a good place to start.

Now, you’ll need to decide how much you have to spend each month. Mortgage or rent payments, utilities (although these vary from month to month, you can estimate an average monthly amount), and debt payments will all need to be included in this figure. The idea is to work out exactly how much of your money is already committed each month. If you are afraid you’re going to forget something, try looking through your bank statements from the previous year.

Flexible spending should also be accounted for during the budget process. For instance, you know that you’re going to spend money at the grocery store each month. You should also include estimates for things like fuel for your car or clothing for you and the kids. Don’t be tempted to budget a bare bones amount that is unrealistic. Be honest and allocate funds accordingly.

Finally, don’t forget to set some savings expectations in your budget. You’re going to want to set up an emergency fund, as well as saving for big ticket purchases you plan to make later. Retirement and college savings plans should also factor into this part of your budget.

Hopefully, when you subtract all of the expenses and savings contributions you planned from your monthly income you haven’t exceeded your income. If you have, then you’ll need to go back and try to find some excess in your budget.

Originating post: Steps to Take When Creating a Family Budget

Steps to Take When Creating a Family Budget is a post from: The Family Wallet.

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If this all sounds familiar, don’t worry. You’re not alone. Many others face the same problem while they’re getting used to the world of budgeting. You’re starting off on the right foot, but then you’re forgetting the last step. After you’ve made plans for your money, you need to follow up and track where you’ve actually spend your money.

Make an appointment to sit down and analyze how you spent your money. You’ll need to save your receipts and write down any cash purchases over the course of the month. Then, break them each into the categories they belong in.

Now that you know where you spent your money, you can determine where you veered from your plan. Did you spend more than you thought you would on lunches at work? Maybe you succumbed to temptation while you were out with your girlfriends and splurged too much on new clothes. Finding out what caused you to blow your budget is the first step to fixing it.

If convenience purchases like work lunches are the culprit, you can find ways to plan ahead for your lunch. Maybe on Monday morning you didn’t have time to pack a lunch, so you gave up and went out with your co-workers. Try making your lunch before bedtime to make lunch planning easier.

For frugally-minded folks who are easily swayed by temptation from your friends, you may find that it’s easier to simply avoid the temptation. Stay away from malls if they are your weakness. Or, enlist a friend to help you stay on track with your spending. You can ask her to stop you if she sees you getting carried away.

In some cases, however, your plans may have just been unrealistic. Rising gas prices, for instance, could make it really easy to underestimate your fuel expenses for the month. You may find that you need to make adjustments to your budget each month to keep it in step with your actual expenses.

Ultimately, the way to find the leaks in your monthly budget is simply to go through your spending and add up everything you spend. Armed with the cold, hard facts about your spending, you’ll be able to fight your weaknesses and get them under control.

Originating post: How to Find Your Money Leaks and Plug Them

How to Find Your Money Leaks and Plug Them is a post from: The Family Wallet.

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