Notes on Parenting

Insights for parenting babies, toddlers, teens, and young adults.

Monday, September 13, 2010

Your Family Needs a Budget

I believe that every family – wealthy or poor – should have a budget. Believe it or not, creating and sticking to a budget can change your life and even strengthen your marriage. Living by a budget will help eliminate stresses in your family that may be caused by finances. Marvin J. Ashton said, “Some claim living within a budget takes the fun out of life and is too restrictive. But those who avoid the inconvenience of a budget must suffer the pains of living outside of it. Families free of crushing debt have a budget.” Budgets not only help keep your family out of debt, but they help you accomplish the goals you have for your family.

Further, Dave Ramsey has said, “Many people view a budget as a straight-jacket that keeps them constrained. Freedom and budget just don't seem to go together. However, when you see that a budget is just spending your money with intention, you'll actually experience more freedom than before. Many people say they've found even more money when they created a realistic budget and stuck with it.” You will find that if you plan where you want your money to go each month, you will be much less likely to let your money go to incidentals.

Starting a budget can seem daunting, but it need not be. Here’s how to get yours started.

When creating a budget, you first need to know where all your money is going. I think the best way to do this is to use a credit or debit card for ALL transactions. (But don’t use them if you don’t trust your self-control with cards!) That way, you can see EVERY transaction online or in your statement. I also like to use Quicken because you can automatically download all your transactions directly from the web, then categorize each transaction. At the end of the month, you can easily produce a report of the total you spent in each category. Another great program is, which is free.

If you do have problems with your spending habits when you have a credit card in hand, you can track your money by saving receipts from each transaction. However, keeping track of all your receipts may be difficult, and paying in cash or check is becoming less practical in our world of online payments, automatic bill-pay, etc.

So whether you use Quicken, make your own spreadsheet, or use the old-fashioned method of receipt-hoarding, do whatever works for you. Track your spending for one month to see where your money typically goes.

Next month, I’ll help you start actually creating your budget. Good luck!

I'm Jenny Willardson from A Young Mom's Guide to Motherhood, Money, & Marriage, and I'm excited to be a new guest author on Notes on Parenting! Look for me every 1st and 3rd Mondays of each month for more advice on family finances.



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