As you pay off the bills for your holiday shopping sprees, you may find your bank account is running on empty. Now is the time to create a budget.
While most folks avoid the “b” word like the plague, it’s extremely important to stick to a budget — especially when you have little ones relying on you. If you’re ready to reign in your family’s expenses, you can create a budget in three simple steps.
- Evaluate your current spending. Figure out where all your money goes each month and determine which expenses you can slash.
- Set a fixed monthly budget. Decide precisely how much your family should spend each month. Don’t forget to keep long-term financial objectives in mind, such as your children’s college expenses and retirement.
- Stay on track. Keep a close eye on spending to ensure you don’t surpass the monthly budget.
Easy, right? Well, not always. As parents know, life often gets in the way of the best intentions. Here are a few helpful tips to keep your budget from derailing.
Build an emergency fund. Life is filled with surprises, some better than others, and if you’re not prepared, these bumps in the road can lead to financial turmoil. That is why your budget should include an emergency fund that could cover at least three to six months of your family’s living expenses. Build it into your budget, set realistic goals and start small. Even if you put aside just $10-$30 each week, your emergency fund will grow.
Don’t try to keep up with the Joneses. Living on a shoestring budget isn’t nearly as fun as spending a bundle in that designer baby boutique or taking the family on a luxurious cruise. But if you stick to your budget, you are more likely to reach your long-term financial goals — whether that is a bigger home in the best school district, a college education for the kids or a comfortable beachfront retirement.
Tap into handy budgeting tools. Now that most financial institutions offer free budgeting tools, managing your money is easier than ever.
Visit www.tampabayfederal.com for more information on personal financial management, including budgeting, expense tracking and debt management.