A family budget serves to project the future income of the family, and balance it with its expenses. Learn to handle them efficiently!

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Money-Smart Solopreneur

This book gives you the essential guide for easy-to-follow tips and strategies to create more financial success.

This article was translated from our Spanish edition using AI technologies. Errors may exist due to this process.

A family budget is a document in which we project all the future income of the family members, and we balance them with their future expenses.

The main objective of preparing a family budget is to have greater control of our expenses, always ensuring that the difference between income and expenses is as large as possible.

As the world of the entrepreneur does not begin or end in your business, but also includes your home and family, it is essential that you learn to make a good family budget to exercise an orderly management of your total finances. So, write down and run these tips:

1. Make a list of your income and expenses

First, in the list of your income you must detail all the aspects such as salaries, investments and pensions of all those who contribute to the family circle, in addition to the amounts contributed from other entries, such as businesses.

Meanwhile, in the column of expenses you must include the lease or dividend; expenses for food, water, electricity, gas, telephone, cable, Internet, transportation, clothing, personal care, automobile fuel, credit cards, credit payments, even recreation.

2. Schedule and detail your expenses with realism

It is essential that you are realistic about your expenses. If you put in zero pesos a month to cut your hair or any other beauty expense, you probably won’t be able to stick to that figure. In that case, it is better to limit the times you go to the hairdresser or the beauty salon than to eliminate the expense completely.

3. Do the math

After you have made the income and expenses list, your income should be greater than your expenses. If not, you will need to cut your expenses. Be honest and reasonable about any expense you cut; you’ll still have to eat, so don’t take away your grocery expenses. However, you can find ways to save on your grocery expenses with coupons and shopping smart.

4. Include your family

Inform your family of the decisions you make about your budget. Also, you should try to get family members who are old enough to understand the process to help you with difficult decisions. For example, if your teenage daughter has a cell phone, maybe she can stop texting so she can go to the movies.

5. Update your budget

The only way your budget will work is for you to remember to update your spending throughout the month to make sure you are on track.

6. Take care of saving

The difference between the income and expenses of each month (balance), would be the savings that you will get monthly. You must ensure that this saving is always positive and that it is the greatest possible. It is recommended that it represents a minimum of 10% of the total income.

The sum of the monthly savings will give you the total annual savings. With this savings you can cover any emergency or eventuality, invest in new businesses or investments, or give yourself some tastes that improve your quality of life.