The simple answer to this question is this: If you didn’t stick to a budget, you would have no way of knowing how much you spend or, for that matter, overspend. At the end of the year you would probably be scratching your head trying to figure out where all the money went to.
Family budgets are important because they not only track your spending habits, but allow you to make adjustments when you fall short each month.
Budgets require discipline. Statistics show that 60% of households stop budgeting after two months because they grow tired recording every single purchase and/or keeping the budget in check.
One budgeter offers this suggestion: Pay yourself first, and then budget the rest. This is an interesting concept. It may, in fact, be the catalyst that encourages you to live within the budget you have set for the family.
Instead of waiting until the end of the month to put aside money for your needs, you can set a specific amount from the get-go and then wrestle with how you will manage the household bills with the money that is left.
This is not to say that you should take a big chunk out of the budget first. It will require that you track your spending habits for about three months. In this way, you can determine what items you buy, how much you spend, and what can be eliminated.
Another woman has a different way of budgeting. The first year, she put every single receipt she had into a box. This included credit card bills, insurance, telephone, cable, car payments, payments to doctors, pharmacists, groceries, clothing – no matter what she spent; every receipt was saved.
At the end of the year, she took the box and sorted all of the receipts into categories. She then made a list of expenditures. It was from these outgoing expenses that she was able to put together a reasonable budget based on her income.
Subsequently, she still sorts through the receipts every year to ensure that her budget is on track. If any tweaking needs to be done, it is done. But the bottom line is that if you know how much you spend – no matter what the purchase – it can make all the difference in creating a realistic budget you can live with.
Moreover, this process allows her to accurately give her accountant all her expenses for the year. It makes tax preparation that much easier.
If you have a family budget that you have not kept up with, now is the time to take out the books and the receipts and get to work. With the economy in the worst shape since the Great Depression, it is important to record every dollar you spend as well as every dollar you can save.