“Creating a budget” captures in its expression and meaning, both the excitement and the apprehension most of us feel when we have to face our financial situation and or lack of planning and accountability in that area.

Most businesses would fail if they ran like we manage our household incomes sometimes. This is not a natural thing for people to want to do. It falls into that ‘I will if I really have no choice’ kind of categories.

However, worth mentioning is that we spend most of our waking hours at work, earning the cash we need to get by and cover our living expenses. Then, we do not take the time to plan what to do with it. We just respond, spend and move on, spiralling, circling around, aimlessly and oblivious mostly about the state of our financial affairs.

This is obviously not true for some of us, for whom planning and organizing comes naturally and budgeting is like second nature and breathing, we just do not think about it, get it done and then barely spare it a second thought. Both these types of approaches can hurt us in the long run.

Our society has also become so fast-paced and focused on success, that we sometimes lose sight of the future perspective, enjoying life and what we do have. We cannot really focus on our own financials for lots of “excuses”, sorry reasons we provide like: trouble slowing down, taking a step back and evaluating our financial situations or not knowing how to set up a family budget.

One of the first hints or tips we provide is advocating financial awareness. This means evaluating openly, freely and honestly where things are at today for your finances and household.

The whole purpose and goal of creating or setting up a family budget is to enlighten and alleviate money pressures. Utilising a tool that can assist you in getting back onto the road to financial freedom, financial responsibility, budgetary health, positive cash flow, with money to spare would be the ideal! As the previous pages have shown the process in itself is not altogether that difficult.

You can certainly see how this real-time, ‘dollar and expenditure tracker’ can assist you to be agile and respond to market, family and monetary pressure, changes and crises. Continue to revise and update your budget as your needs, family and circumstances change.

Money is such a daily necessity and ever-present in our comings and goings. We have different currencies, structures, procedures and all around the world, but in the end, it is the currency that makes the world go round, fuelling the global economy.

Seen from that perspective, we often feel that taking control of our own finances and expenditures will not have much of an impact, as we are all at the mercy of the wheels and gear of a churning economical machine, with government and banking rules, regulations, trade and principles, ethics and decision-making that affects our quality of life.

Good money management skills in the household is crucial, not only for survival and good financial state of affairs, it teaches our children how we think handling money should be taken care of. They watch us so closely.

We model certain behaviours, spending patterns, discipline or maybe throwing all caution to the wind with credit card spending, debt and reminder notices all over the house, creditors calling, afraid to walk to the mailbox to remove the bills, and more.

What chance do our children have to end up entangled in that spiralling and vicious circle we spoke about earlier? Money in, money out?

How do we get to the point where family budgeting is a learning tool to help us teach our kids to work better with their funds? Whether through allowances, mutual savings goals, their own account or more, as parents we have an opportunity to instil some solid financial skills early on in life that will assist them later, as they work toward their independence and family budgets of their own!

Do some soul-searching before you start your budgeting process. How motivated are you to plan, set-up and stick to a budget?

Then let us get started, together. There are lots of practical suggestions for setting up a family or household budget. We will never be able to cover them all or the mechanics and intricacies all at once. You will however continue to find in these pages valuable insights and tit-bits to help you pursue better financial management and cash flow, budgeting in general.

It is all about making your dollar go further. Investing in the time and effort that it will take to get to that point of greater financial security and possibly even have a surplus eventually!

1: Take stock and face the facts head-on, honestly and with serious commitment, drive and purpose. Assessing your own capital worth and analysing your home life and situation from a financial perspective is of utmost importance.

2: Plot your own course. Formulate some financial goals and lay out your own roadmap on how to get where you need and want to be, financially speaking.

3: Take a thorough, critical and factual look at your fiscal situation and status. Unbiased and honest is best. Get a most recent credit report and look over your bank and credit cards statements, tax returns and other financial sources of information.

Get a financial planner to assist you if you are unsure about what to use and include or exclude in this assessment. You might also want to take a broader perspective and discuss retirement, priorities, insurance needs, wills. The time is now and the place is here to take control of your financial situation and life.

4: Committing the time and effort to build your financial action and spending plan, budget and goals should get priority and might just be the most valuable undertaking and time well spent, not wasted you might ever set aside!

5: Think of how you define your own financial worth. Reflect on what it is, what you base it on. Is it concrete data and fact, perception or maybe even a wild guess or estimate?

This side of the balance sheet for most people remains fixed and is relatively easy to do, when they put their minds to it.

6: Always remember that this process and document known as a family budget is only going to be as good as the data and updates you provide! When acquiring new assets, ensure that this side of the balance sheet is strengthened appropriately!

7: Adjust your focus slightly to more in-depth and longer term. We live so much in the moment, especially if we purchase things or spend money. We just look at the cost today and do not think of the total overall cost (i.e. the cost plus interest over time).

8: Actually setting financial goals will also energise you; give you a reason to work towards something meaningful. You might even start to enjoy uncovering opportunities for frugal choices, ‘penny-pinching’ and what we prefer to call creative savings techniques!

9: Become financially literate and master the family budget process. Demystify some of the complexities and just try some financial responsibility, without being overwhelmed by the intricacies of calculations and more.

Remember, there is always professional help out there, once you have gotten started, completed the groundwork to move in and on to a comprehensive consultation with a professional financial planner, who can explain the lay of the land and the impact of your situation and plan in more detail.

10: Family budgeting can be used to teach you good financial habits: get in the habit of paying in cash, using your credit cards only for emergencies.

Learn how to stop buying on impulse and use your willpower to walk away, say no thank you and leave it at that. Shop at wholesale and discount department stores. Respect your budget limits and stick to it.

Always try to find ways to supplement your income, part-time jobs, your own business or rent a room or floor in your house, offer storage, invest in real estate and consider taking in a boarder or tenant.

Turn your heater way down in your house and turn off a few lights. Eliminate areas where heat and energy is lost. Cut back on home and mobile phone use. Check insurance policies shop around and raise your deductible to lower your monthly bill.

In isolation, these probably do not have a lot of impact individually, but when they are combining in a well-planned, cleverly executed family budget, with discipline and consistency, they will start to make a difference and you will start to see the benefits that will impact your bottom line.

11: A family budget is a learning tool and process to empower individuals and families to better self-manage their financial resources, spending, cost cutting and household finances. In general you will be able to set-up your own personal or family budget.

By tackling the skill and mastery of smart budgeting, you will have a greater understanding eventually of exactly where and by how much, you need to adjust expenses to either live within your means or know how much extra you need to maintain your current lifestyle.

12: Other family budgeting process steps will require you to be able to identify and categorise all your expenses and, coupled with an easy filing system, create the backdrop and framework for all future budgeting and fiscal planning at home or elsewhere.

13: Family budgeting is not something that is taught by parents or schools; however it is such a simplistic concept, process and task that it is almost unthinkable that we are not placing greater focus on it these days.

In the end, it is all about what you do to make ends meet. To be in charge of your finances, family budgeting gives you a sense of real understanding and control over your money, not the other way around.

14: Family budgets allow you to gain knowledge you would otherwise not have had at your fingertips, concerning your own and family finances.

For example: Knowing where and what expenses you can affect or effectively change, to cut costs appropriately, timely and immediately in certain cases is very helpful.

15: To enable your family budgeting process set up an easy and orderly log, record-keeping and filing system; and make spending notes often to track your money and habits.

16: Understanding, explaining and sharing the benefits of good budgeting with others is pivotal, to get them on-board and participating actively in the family budgeting process. Ask for their ideas and input. Two heads are better than one in most cases. They might think of savings opportunity, consolidations and/or things to do without, that you did not even think about or considered for a second!

17: Here are some more family budgeting summary steps to remember:

• Identify and categorise all expenses – look at categories and line items, types and timing of expenses, amounts and budget accordingly. Remember categories like miscellaneous, discretionary, maintenance, emergency and others. These will also provide you with a little more flexibility when you do have to massage your money, budget and cash flow processes to meet need, demands and change.

• It is of utmost importance that we are able as family budgeters to allocate and adjust expense items, prioritise need with foresight, discretion, informed choice and empowered confidence, stemming from core and in-depth knowledge and accurate information.

• Practice utilizing a basic budgeting framework and recording method in your family budgeting and formulate your very own personal and or simple ‘Home Budget’ or rough first draft of your financial situation. Chances are you will see and learn something you did not know before.

• Even if you feel you just have a basic understanding of budgeting and how it can improve your own management of your own and household finances will make a big difference. Take the time out to explore and try putting your first one together, following the steps given earlier in this booklet.

This guide and its content, will appeal to almost anybody:

• anyone who recognises the need to budget;

• those who have never or not yet learnt how to budget;

• individuals or groups who are looking for a first-step debt-consolidation strategy and technique,

• someone who has come into some money through a lottery, casino win, gift or inheritance and want to ensure they know how to budget properly before they start spending left, right and centre.

• It fosters independence and fiscal responsibility and accountability.

• Even those with reasonable income, now receiving less, will find some answers here.

• The one who needs to understand expenses that need to be adjusted; and even those who prefer to feel and be in control of their expenses.

• Family budgeting enables them to be in the position to know where they need to modify their lifestyle and make significant adjustments to ensure a bright and happy financial future.

Some of the most important process elements and content pieces of family budgeting to read more about, study, learn and practice, hone and refine are:

• A fundamental understanding of the principles merits and mechanics of budgeting and the budgeting process itself. All the process steps to get your through the journey and to the resulting document, tool or magic numbers!

• Distinguish between fixed, variable and discretional expenditure(s)

• Identify and categorize all expenses, breaking them into categories and line items, time-frames, other detailed sub-classifications and clustering;

• How to set-up housekeeping budgets and what to consider

• Identifying hidden expenses

• Identifying areas of discretionary spending, habits and perhaps over-spending risk areas

• Setting up expenditure recording systems

• Decide on the best way suitable for you and your family to monitor what you spend

• Set-up a very basic Home/Personal Budget Filing System

• Any calculations, formulas and budget principles you think will help you maximize and optimize your cash flow and money-management

Another great way to learn about family budgeting is to ask around and to learn from others. With the internet at our disposal, there are numerous reliable sources of practical, tried, tested and true tips, strategies and techniques to follow. We selected but a few to provide a sample. Never underestimate the power of a shared experience!

Sometimes exploring a financial activity like family budgeting conceptually is not enough. Getting a practical perspective, with some hands-on tips is more meaningful than superficial description or analysis.

There are lots of definitions, opinions and numerous books have been written on the subject of budgeting for families, by families and others. In our information-age, knowledge is power these days and lots of parents and professionals share and voice their opinions openly on the internet, sharing and growing the body of knowledge. We selected a few examples to encourage others to explore these at their leisure as well.