If you find yourself wondering just where your money is going then it might be time to take a second look at your budget.
Part of a good budget is knowing exactly how much money you have coming in and going out. Once you know your expenses you can begin to determine where you might be spending too much and where you have opportunities to save. A good time to do this is before a deployment, but really anytime is a good time for a budget checkup.
Here are five tips to creating a successful budget:
Determine what financial goals you have as a family. Having a conversation about money can be really difficult. Start by talking about what financial goals you have for the future without judging one another, or dismissing what one person might think is a priority. Have fun with it and allow yourself to dream about the possibilities. These financial goals could include saving for a down payment on a car, a trip to see family for Christmas, a trip to Disney, a motorcycle, a new computer, an emergency fund for unexpected expenses, paying off a credit card debt, saving for retirement, the sky's the limit!
Make a list of all your expenses for the last three months. You can use a spreadsheet on your computer, an app, or even a pen and paper. The point is to track how you are spending your money. You can then average the amount you spend in each category. This might seem like a huge undertaking, but it will be worth it when you have a successful family budget.
Write down all your income deposits. This would include your spouse's direct deposits and any income you have as well.
Determine which items on the expenses list are a want or a need. Absolute necessities are things that are important for our basic survival.
These are things like:
Near necessities include things like:
Insurance coverage (property & casualty, medical, life)
Utilities (electric, gas, water)
Personal care expenses
Child care expenses
Trim the want and need list. This is the biggest area where you can find ways to save money. You can even find ways to save on the "necessities and near necessities" list by choosing to drive a modest car instead of a luxury sedan and opting for budget friendly fashion choices instead of all designer labels (you get the idea). By concentrating on the "want list", we can make small changes that can have a big impact. For example, look for ways to save while still enjoying some of the things you love. You will find while you are not depriving you or your spouse, you can still work towards building financial wealth and saving for that shared goal(s) you determined in step one. Keeping your long term plan in mind and reminding yourself of your goal will help keep you on track when you feel like overspending.
Here are some examples of how small changes can have a big impact on saving.
Eating Out: Save by eating out only once a week and skip the appetizers, dessert and drinks.
Ordering Pizza: Maybe you order pizza every Friday night as a family tradition. Save by "picking up" your pizza instead of having it delivered. Save even more by just once a month or every other week, making homemade pizzas with everyone's own personal favorite toppings.
Video Games: Save BIG by buying gently used games instead of paying full price or use rental services like GameFly.com.
Miscellaneous: Have a set amount of "fun money" for you and your spouse. Opt to use cash and when it's gone, it's gone. Having a set amount to spend will keep you on track with your budget and neither of you will feel deprived. For example, if you want to stop for Starbucks with a girlfriend once in a while you can and he can have lunch with guys or go play that game of golf.
Gifts: Save by choosing home cooked and homemade. Sharing a favorite recipe, family photos and making a unique card are all creative, inexpensive ways to still give a gift from the heart.
I hope these tips have given you some inspiration to create your family budget. You can also visit or call your local base Fleet and Family Support Center or Warfighter and Family Readiness Center to make an appointment with the Personal Financial Manager. They can help you design a game plan to work towards your financial goals and by taking action, you'll be taking steps to building wealth and living debt free.
What creative way have you saved money?