How to Create a Workable Budget



Formulating a workable and practical budget is one of the most important steps towards streamlining your personal finances. Budgets might need to be modified to incorporate unexpected or sudden expenses but by and large, basic patterns remain constant. Creating a family budget will not only help you regulate needless expenditure but also helps you save more money.

The family budget can be made out using a simple diary and pen or using an Excel worksheet.


Tips to create a workable family budget


Calculate your total income per month. Total income would include both you and your spouse’s income (if both are earning). The next step involves making out a list of all regular expenses that you incur during a month. These would include rent or mortgage, electricity and water bills, grocery and food expenses, transport and fuel expenses and repayment of loans if any. These expenses are going to be more or less the same every month. Listing them out will give you a fair idea of your total monthly expenses.

Summer holidays and Christmas could see extra expenses. Before making out a budget for the month, take into account such extra expenses that you are able to foresee and then plan for them. If your children are going to a private school, then term fees will also have to be included as and when payments come up.

If you are not able to remember how much you paid out on bills, refer to your bank or credit card statements. To make your work easier, clip a copy of your statement to your budget.

The best time to make out your budget is the beginning of the month when salary cheques are due. This way you are using your budget to utilise your income in a planned manner as opposed to encouraging an ad-hoc and random spending pattern.

Ensure that your family budget is practical and solid based on figures and real expenses. By taking a look at your budget, you must be able to make out at a glance where you stand financially.

After making out the family budget for the month, ask everyone to stick to it. Avoid making unnecessary purchases or using your credit card indiscriminately to get through the month.

In the initial stages, creating a budget and sticking to it may seem like an impossible task. But give yourself some time and the budget will begin to work for you.



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