{"id":340,"date":"2013-05-03T11:04:07","date_gmt":"2013-05-03T15:04:07","guid":{"rendered":"http:\/\/thegraftonfirm.com\/?p=340"},"modified":"2022-02-14T06:06:56","modified_gmt":"2022-02-14T11:06:56","slug":"creating-a-family-budget","status":"publish","type":"post","link":"https:\/\/thegraftonfirm.com\/how-to-never-need-our-debt-services\/creating-a-family-budget","title":{"rendered":"Creating a Family Budget"},"content":{"rendered":"<p>One of the most important things you can do to manage and control your household finances is to create a family budget.\u00a0 In the age of online bill paying, debit cards, and still moderately easy credit, it&#8217;s easy to spend more than you realize.\u00a0 Many of my clients have absolutely no idea what they&#8217;re spending on things like groceries, insurance, or even their mortgage or electric bill.\u00a0 I may take their paystubs and calculate out their monthly income, then when I use the numbers they give me for their monthly budget it appears that they have $400-600 left over to save and pay down credit cards, but they tell me that they&#8217;re always strapped and waiting on that next pay day.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Step_1_Find_Out_Exactly_Where_Youre_Spending_Money_Now\"><\/span>Step 1:\u00a0 Find Out Exactly Where You&#8217;re Spending Money Now<span class=\"ez-toc-section-end\"><\/span><\/h2><div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<label for=\"ez-toc-cssicon-toggle-item-662afc5928e01\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-662afc5928e01\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/thegraftonfirm.com\/how-to-never-need-our-debt-services\/creating-a-family-budget\/#Step_1_Find_Out_Exactly_Where_Youre_Spending_Money_Now\" title=\"Step 1:\u00a0 Find Out Exactly Where You&#8217;re Spending Money Now\">Step 1:\u00a0 Find Out Exactly Where You&#8217;re Spending Money Now<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/thegraftonfirm.com\/how-to-never-need-our-debt-services\/creating-a-family-budget\/#Step_2_Analyze_Your_Spending_for_Potential_Savings\" title=\"Step 2:\u00a0 Analyze Your Spending for Potential Savings\">Step 2:\u00a0 Analyze Your Spending for Potential Savings<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/thegraftonfirm.com\/how-to-never-need-our-debt-services\/creating-a-family-budget\/#Step_3_Set_a_Savings_Goal\" title=\"Step 3:\u00a0 Set a Savings Goal\">Step 3:\u00a0 Set a Savings Goal<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/thegraftonfirm.com\/how-to-never-need-our-debt-services\/creating-a-family-budget\/#Step_4_Priorities_Priorities\" title=\"Step 4:\u00a0 Priorities, Priorities\">Step 4:\u00a0 Priorities, Priorities<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/thegraftonfirm.com\/how-to-never-need-our-debt-services\/creating-a-family-budget\/#Step_5_Publish_Your_Budget\" title=\"Step 5:\u00a0 Publish Your Budget\">Step 5:\u00a0 Publish Your Budget<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/thegraftonfirm.com\/how-to-never-need-our-debt-services\/creating-a-family-budget\/#Points_to_Ponder\" title=\"Points to Ponder:\">Points to Ponder:<\/a><\/li><\/ul><\/nav><\/div>\n\n<p>So, how can you tell what you&#8217;re actually spending?\u00a0 It takes some work at the front end, but most banks online banking tools make this easy for you.\u00a0 For example, Bank of America&#8217;s online banking tools allow me to classify every debit charge I make.\u00a0 Then it continues to mark future purchases with the same merchant.\u00a0 Their &#8220;Portfolio Services&#8221; then allows me to create a chart showing exactly how much money I spent in each of the categories I defined.<\/p>\n<p>Programs like Microsoft Excel can help you do the same thing if your bank doesn&#8217;t offer these online tools.\u00a0 The website <a href=\"https:\/\/mint.intuit.com\/\" target=\"_blank\" rel=\"noopener noreferrer\">Mint.com<\/a> offers a service that they say will help you &#8220;Understand what&#8217;s going on with your money.&#8221;<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Step_2_Analyze_Your_Spending_for_Potential_Savings\"><\/span>Step 2:\u00a0 Analyze Your Spending for Potential Savings<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Creating a budget that just spends exactly how you spend now doesn&#8217;t do much good.\u00a0 One of the purposes here is to help you identify and control your spending.\u00a0 So, once you know where you currently are spending money, we need to look and see what you can do to save some money in these categories.\u00a0 One recent client of mine had no idea that she was spending nearly $250 per month on lunch at work.\u00a0 She started brown bagging and saved more than $100\/month.\u00a0 I&#8217;ve rarely had a client who was not surprised by some aspect of their spending habits and could not find a way to save.\u00a0 Check out our article on <a title=\"Ideas to Reduce Spending\" href=\"https:\/\/thegraftonfirm.com\/how-to-never-need-our-debt-services\/top-10-ways-to-reduce-expenses\" target=\"_blank\" rel=\"noopener noreferrer\">ideas to reduce spending <\/a>to see if they can help you.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Step_3_Set_a_Savings_Goal\"><\/span>Step 3:\u00a0 Set a Savings Goal<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Everyone needs to save money.\u00a0 If you do not have an emergency fund for your family, that should be a top priority.\u00a0 The fund should contain enough money for your family to provide food, shelter and utilities for three months in the event of job loss or illness.\u00a0 In today&#8217;s economy of long term unemployment, if you can do more, you absolutely should.\u00a0 So, figure out how much you need to save to get to that goal within the next 12 to 18 months, faster if you can.<\/p>\n<p>One great website I&#8217;ve found to encourage savings and setting goals is <a title=\"Smarty Pig \" href=\"https:\/\/www.smartypig.com\/\" target=\"_blank\" rel=\"noopener noreferrer\">SmartyPig.com.<\/a>\u00a0 This won&#8217;t work for your emergency fund, but for other savings goals you have, this site offers competitive interest rates, FDIC backing, the ability to increase your funds by redeeming in gift cards, and a Social Media component to not only encourage your savings, but also to allow friends and family to contribute to your goal.<\/p>\n<p>The main key to setting a monthly savings goal is that it should be realistic.\u00a0 You&#8217;re probably not going to be able to afford to save 30% of your take home pay every month (if you can, that&#8217;s fantastic and you absolutely should).\u00a0 And like all goals, setting an unrealistic one is a surefire way to discourage and derail your efforts.\u00a0 So, be realistic.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Step_4_Priorities_Priorities\"><\/span>Step 4:\u00a0 Priorities, Priorities<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The first items on your budget should be the highest priorities.\u00a0 Take a life-saving drug every month?\u00a0 That budget item goes up top.\u00a0 Food, shelter, and on and on until you get to the absolute discretionary spending.\u00a0 It&#8217;s just as important to prioritize these, too.\u00a0 The perspective it gives you helps you know what can be forestalled or eliminated to make way for your savings goals.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Step_5_Publish_Your_Budget\"><\/span>Step 5:\u00a0 Publish Your Budget<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>This doesn&#8217;t mean have it bound, but I would suggest your print it out and share it with those closest to you.\u00a0 Accountability is your friend.\u00a0 Carry it with you, track your spending, hold yourself and your family members accountable.\u00a0 You should NOT however, chisel the budget in stone.\u00a0 It will need adjusting.\u00a0 You may find that the priorities you set shift.\u00a0 Once you meet the core savings goals, you may want to relax some of your goals.<\/p>\n<p>Ask a dieting expert and they&#8217;ll tell you, that deprivation is one of the leading causes of diet failure.\u00a0 So too with setting a too stringent budget.<\/p>\n<p>Our family budget is a constant work in progress.\u00a0 We are always looking for ways to save money, but we realize too that we need the occasional deviation to maintain our sanity.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Points_to_Ponder\"><\/span>Points to Ponder:<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>If you&#8217;re in a relationship and creating a &#8220;Family&#8221; budget.\u00a0 Do NOT do this by yourself.\u00a0 Your family should be involved from the top to the bottom.<\/p>\n<p>If you aren&#8217;t being vigilant and keeping yourself on track, then you&#8217;re just wasting your time.<\/p>\n<p>Many people find it easier to have savings automatically deposited from their paystub into an account at a different bank than checking.\u00a0 This makes it a little more difficult to tap into the savings for non-emergency situations.<\/p>\n<p>If you pay off your car while you&#8217;re on your budget, consider paying your savings account the same amount as your car note for a little while.<\/p>\n<p><strong>After you&#8217;ve establish an emergency fund<\/strong>, consider the interest you&#8217;re paying on your other loans.\u00a0 You may be better off paying down higher interest lines of credit, especially considering that with todays artificially low interest rates you&#8217;re likely paying higher interest than your money is making in the bank.<\/p>\n<p>Don&#8217;t let the artificially low interest rates discourage you from saving.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>One of the most important things you can do to manage and control your household finances is to create a family budget.\u00a0 In the age of online bill paying, debit cards, and still moderately easy credit, it&#8217;s easy to spend more than you realize.\u00a0 Many of my clients have absolutely no idea what they&#8217;re spending [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":576,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[66],"tags":[],"_links":{"self":[{"href":"https:\/\/thegraftonfirm.com\/wp-json\/wp\/v2\/posts\/340"}],"collection":[{"href":"https:\/\/thegraftonfirm.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thegraftonfirm.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thegraftonfirm.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/thegraftonfirm.com\/wp-json\/wp\/v2\/comments?post=340"}],"version-history":[{"count":1,"href":"https:\/\/thegraftonfirm.com\/wp-json\/wp\/v2\/posts\/340\/revisions"}],"predecessor-version":[{"id":3339,"href":"https:\/\/thegraftonfirm.com\/wp-json\/wp\/v2\/posts\/340\/revisions\/3339"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/thegraftonfirm.com\/wp-json\/wp\/v2\/media\/576"}],"wp:attachment":[{"href":"https:\/\/thegraftonfirm.com\/wp-json\/wp\/v2\/media?parent=340"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thegraftonfirm.com\/wp-json\/wp\/v2\/categories?post=340"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thegraftonfirm.com\/wp-json\/wp\/v2\/tags?post=340"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}