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Top 5 tips to follow to Create a Budget for your Family

It can be scary to think about the amount of debt you have or where your really spending all of your money. Having a budget it s a good thing. You don’t have to feel scared or afraid about creating a budget. When you have a budget you are in control of your money. You are making your money work for you and not you working for your money. Here are few tips to show you how to create a budget for Your Family

Know Your Current financial postion
Before you jump on the budget ban wagon you need to know where you’re at financially at this very moment. Sometimes we don’t want to truly face the fact that we are in financial trouble so we just keep doing the things that we have been doing and hoping for a different result. You need to take ownership of your financial situation no matter what it is. Taking ownership of you’re financial situation doesn’t mean that you are a bad person or that you’re not capable of managing you’re money. By taking ownership you are acknowledging that you know that your financial situation is not in good shape and that you are wanting to change it for the better.

Know Your Monthly Expenses
Now that you have taken responsibility of your financial situation and have figured out what your take home pay is it’s now time to get to work. This is when you really get to see what your spending habit looks like. To figure out what your expenses are you will need to gather all of your bills and bank account statements. Now create 4 main categories to put your expenses into.

Know Your Take Home Pay
Your take home pay is not how much money you make before taxes are taken out. Your take home pay is the amount of money you have left after all taxes and deductions have been taken out of your paycheck. Your take home pay is also referred to as your net income. If you take your last 2 or 4 paycheck stubs and add the total net income up this will be your monthly take home income.

Keep Track of Your Spending 
For the next few months you will want to track where every dollars is being spent. You will want to make any necessary adjustment to your budget based on your spending. A good way to manage your spending is to take out all of your spending money and leave everything else in the bank. Once you have spent all of your personal spending money try to refrain from spending any more money unless it’s really an emergency.

Create A Budget 
Now that you’ve figured out how much money you are spending in each category you will be able to create a budget based on these numbers. The first thing you will want to do is see if you monthly total take home pay is enough to cover all of the expenses that you have. If you have more expenses then income you need to see what things you can eliminate or cut the expenses down.