Creating a Budget that Works for your Family

Can you guys believe that the month of June is almost over? Man, this summer is just flying by!! I sat down to figure out our July household budget last night and thought that it might be helpful for some of you if I let you know how we do our budget.

Let me start out by saying that we have just started doing a real concrete budget over the past year. That is so very sad to me!! My husband and I have always been very careful with our money, but it's amazing how big of a difference it can make to actually have a concrete budget to work from. I know that there are a ton of different ways to do a budget, and what works for one family might not work for another. You might already have a GREAT way to do a budget for your family, but I just wanted to share what works for us.

At the end of each month my husband and I sit down to make our budget for the following month. We know exactly how much money we will have coming in for the following month, so we sit down and "spend" it all out on paper. We have basic categories that we assign money to.

Our categories include:
-Tithes
-Missions
-Savings
-Mortgage
-Utilities (electricity, water, cable, phone, etc.)
-Food
-Medical (dr. visits, copay, prescriptions)
-Clothing
-Insurance
-Transportation (gas, insurance, oil change, car payment)
-Gifts
-Miscellaneous

Each family will have slightly different categories...you might have a baby care category, or a pet care category, or a vacation category, etc.

We list all of our categories out and write out exactly how much we are going to spend in each category through the month. We "spend" every bit of the money that we have coming in on paper so we know where our money will be going. This allows us the opportunity to really take charge of our money. Before we started doing this, we'd say that whatever amount we had left at the end of the month would go to our savings account. Wouldn't you know that we never seemed to have extra at the end of the month. This way we are sending it to our savings account right off the bat. It is there if we actually need it, but once it is out of our checking account, it is so much harder to try to justify spending it (unless there really is an emergency). Once the money in each category is spent, we know that we are done spending for that specific category. If all of our miscellaneous "fun" money is gone by the first week of the month, then we know that we'll have to scrimp for the rest of the month. Doing our budget this way has really made us aware of what we are spending and helps us to decide if we really want to spend our money on certain things. At the end of the month if we still have money left in any of our categories, we send it off to savings.

How do you do your budget? Or do you even do a budget? I sure wish that we had started following a budget years ago. It is so wonderful to feel like we have a say in how our money is being spent now!! If you have any other ways to do budgets or any tips on what works for your family, let me know. Leave a comment...you never know, your idea might help someone else!!