Here are some basics to how I budget with a large family. However always remember just as every person has an individual fingerprint, every family has individual financial needs and each budget should reflect that. NO ONE budget tool works for everyone.
1) Get to know your BASE. The Base is the amount you must pay each month to meet fixed expenses. If you have not done so already, take a month to note and record what you spend on such necessities as rent/mortgage, gas, electricity, insurance, food, telephone service, savings, etc.
2) Cash is QUEEN (Kings are not usually running the budget). These days, it’s all too easy to whip out a credit card when making even small purchases. Not only does this habit lead to painful (and often unnecessary) interest charges, it makes it too easy to lose track of how much you’re actually spending. (Which is kind of the idea, as far as the credit card companies are concerned.) When you pay cash, you not only save on interest, but you’re less likely to buy unnecessary or “impulse” items.
3) Dine In. Eating out is easy, convenient, fun—and a potential budget-buster. Even seemingly “low-cost” meals like breakfast or lunch can cost 200% to 300% more at a restaurant than if prepared at home. Home-prepared meals also tend to be more nutritious, lacking the fat, salt and sugar (not to mention over-sized portions) most restaurants use to make their food appealing. And speaking of restaurants…
4) Share and Share Alike. When you do go to a restaurant—Hey, a person has to enjoy life, right?—go to those known for large portions…and then split the entrée with your dining companion. You’ll not only save money, but calories. Oh, and don’t be embarrassed about splitting a meal. A lot of people do it.
5) Clip/Print Those Coupons. Use them whenever possible to save on products and services you normally buy. Let me repeat that: On products and services you normally buy. Although merchants would like nothing better than for you to buy a new item because you save 10% on your purchase, the real savings only come when you reduce your outlay, not increase your consumption.
6) Look for Less Costly Entertainment Alternatives. Today, we’re surrounded by a feast of entertainment options. From cable/satellite TV to video games to DVDs to movies to the Internet, there’s virtually no limit to the ways we can spend our leisure time. Or our money. To reduce monthly expenses, limit your choices to those that deliver the best “bang for the buck,” and then look for the most cost-efficient ways to enjoy them.
7) Put Your Kids on an Allowance. If you have children who are old enough to be responsible with money, give them a weekly allowance for “luxury” items like fast food, movies, music, etc., rather than just paying for these items “as needed.” Not only will you be able to better control the size of these outlays, but you’ll help instill good budgeting habits in the coming generation.
8) Don’t be a "fashonista". Clothing styles change rapidly so you’ll feel pressured to replace your wardrobe long before your clothes actually “wear out.” To avoid this trap, buy your primary wardrobe at off-price, thrift, consignment or outlet stores, and choose “classic” styles not likely to look “old” six months from now. A word of caution: Don’t buy cheap. A cheap piece of clothing can become faded or wrinkled after just a few washings, while a better-made item can last years.
9) Protect Yourself. Smart budgeting involves not just controlling present outlays, but making sure you don’t get slammed by gigantic bills in the future. This means purchasing reasonable amounts of car insurance, health insurance, homeowner’s insurance and even disability insurance—and finding room in your budget to pay for them. A little sacrifice today can protect you against potential bankruptcy tomorrow.
Domestic budgeting takes awareness, discipline and, yes, some sacrifice. But the long-term rewards can be substantial, leading to a more stable, more sustainable and, yes, happier household.
1) Get to know your BASE. The Base is the amount you must pay each month to meet fixed expenses. If you have not done so already, take a month to note and record what you spend on such necessities as rent/mortgage, gas, electricity, insurance, food, telephone service, savings, etc.
2) Cash is QUEEN (Kings are not usually running the budget). These days, it’s all too easy to whip out a credit card when making even small purchases. Not only does this habit lead to painful (and often unnecessary) interest charges, it makes it too easy to lose track of how much you’re actually spending. (Which is kind of the idea, as far as the credit card companies are concerned.) When you pay cash, you not only save on interest, but you’re less likely to buy unnecessary or “impulse” items.
3) Dine In. Eating out is easy, convenient, fun—and a potential budget-buster. Even seemingly “low-cost” meals like breakfast or lunch can cost 200% to 300% more at a restaurant than if prepared at home. Home-prepared meals also tend to be more nutritious, lacking the fat, salt and sugar (not to mention over-sized portions) most restaurants use to make their food appealing. And speaking of restaurants…
4) Share and Share Alike. When you do go to a restaurant—Hey, a person has to enjoy life, right?—go to those known for large portions…and then split the entrée with your dining companion. You’ll not only save money, but calories. Oh, and don’t be embarrassed about splitting a meal. A lot of people do it.
5) Clip/Print Those Coupons. Use them whenever possible to save on products and services you normally buy. Let me repeat that: On products and services you normally buy. Although merchants would like nothing better than for you to buy a new item because you save 10% on your purchase, the real savings only come when you reduce your outlay, not increase your consumption.
6) Look for Less Costly Entertainment Alternatives. Today, we’re surrounded by a feast of entertainment options. From cable/satellite TV to video games to DVDs to movies to the Internet, there’s virtually no limit to the ways we can spend our leisure time. Or our money. To reduce monthly expenses, limit your choices to those that deliver the best “bang for the buck,” and then look for the most cost-efficient ways to enjoy them.
7) Put Your Kids on an Allowance. If you have children who are old enough to be responsible with money, give them a weekly allowance for “luxury” items like fast food, movies, music, etc., rather than just paying for these items “as needed.” Not only will you be able to better control the size of these outlays, but you’ll help instill good budgeting habits in the coming generation.
8) Don’t be a "fashonista". Clothing styles change rapidly so you’ll feel pressured to replace your wardrobe long before your clothes actually “wear out.” To avoid this trap, buy your primary wardrobe at off-price, thrift, consignment or outlet stores, and choose “classic” styles not likely to look “old” six months from now. A word of caution: Don’t buy cheap. A cheap piece of clothing can become faded or wrinkled after just a few washings, while a better-made item can last years.
9) Protect Yourself. Smart budgeting involves not just controlling present outlays, but making sure you don’t get slammed by gigantic bills in the future. This means purchasing reasonable amounts of car insurance, health insurance, homeowner’s insurance and even disability insurance—and finding room in your budget to pay for them. A little sacrifice today can protect you against potential bankruptcy tomorrow.
Domestic budgeting takes awareness, discipline and, yes, some sacrifice. But the long-term rewards can be substantial, leading to a more stable, more sustainable and, yes, happier household.
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