Last Updated on June 3, 2021 by Maggie Sutton
Learning that the beginning of summer is the perfect time to reevaluate your budget may be shocking. You might be thinking that all the summer trips, vacations, and camps, make it a lousy time. In fact, those things are what makes it the best. Figuring out how to cut unnecessary expenses can assist you in funding things like vacations. Before you know it, you’ll be researching all of the best attractions and flying off for your trip! It’s also helpful to know how much money you will need to pay the bills before you accidentally blow it on extra expenses.
In reality, budgeting is always a good idea, no matter what time of the year it is. Other times of the year may require you to change your budget for unexpected reasons like the start or end of a job.
These occurrences may cause you to cough up large amounts of money. Homes for Heroes offers special deals for your area. Click here to see what ways you could save. Whatever your reasons are for taking another look at your budget, here are a few practical ways for how to get started.
Determine Income
Adding together all income is the first step to determining how much money you can spend on certain things. Tally your family’s monthly income after taxes. If your pay depends on how many hours you work, keep track of your pay in a spreadsheet for a few months to get an estimate. Just be sure not to add income that isn’t dependable, like bonuses and tax refunds.
Track Monthly Expenses
Determine what your family’s ‘take-home income’ pays for each month such as rent, car payments, child care and entertainment. It may help to prioritize the expenses from what’s most important to least, just as a precaution to the unexpected events of life.
Home
Experts say that the expenses of your home should remain below 30 percent of your income. Household expenses include all the things that keep your home running:
- Rent or mortgage
- Utilities
- Insurance
- Taxes
- Household services such as lawn care or pest control
- Furnishing or equipment
- Repairs
- Housekeeping supplies
That’s a lot of things to keep under 30 percent of your income, but it’s possible if you divide everything into different percentages. Rent or mortgage is going to take a massive chunk of that money. The rest of the things on the list most likely won’t cost you a fortune but can add up quickly. There are ways to save though, such as insurance bundling for home and car insurance, which can help keep costs down and give you peace of mind, should something happen.
Utilities are challenging to plan for because you never know exactly how much they are going to be. Creating a way to keep track of your utility payments, such as a spreadsheet, will help estimate how much you’ll spend.
Food and Groceries
Your food expenses will take another significant portion of your income. It is acceptable for five to fifteen percent of your budget to go towards food. If you are spending more than that, try to figure out ways that you can save on food. Take advantage of coupons. In today’s world, finding them is easier than ever with access to the internet. Finding great deals online is a big help when cutting back on food expenses. Look for stores that give out coupons for food you buy. For example, if you buy a tub of ice cream, you might get one printed for buy one get one free on the back of your receipt.
Transportation
It doesn’t matter if you have a car or not, your transportation costs money. Even if you don’t have a car, you probably still pay for cab costs, bus fare or the subway. If you do have a car, you may not have a car payment. However, you still have to pay for insurance, gas, and repair costs. If you do have a car payment, you spend for all of that plus the amount of your car payment each month.
Transportation can get costly. Depending on how much you drive, you’ll need to set aside cash for gas each week to get you through to the next payday. Repairs can be unexpected, but planning for them each month helps relieve some of the stress if something does go wrong like getting a flat tire. Add what your expenses are for transportation based on your situation. You should spend about eight percent of your income on transportation.
Child Care
Finding dependable and safe child care can be a significant expense and headache, especially if the children are not old enough for school. Despite care being costly, it is necessary if you’re a single parent or if both parents work outside of the home. Luckily, this cost is usually dependable each month.
Expect the Unexpected
Unexpected events are life’s way of keeping things exciting, or stressful, depending on how you perceive the world. Either way, they’re going to happen. It creates less stress and anxiety when you plan for costly unexpected occurrences. Having a savings account set aside specifically for “rainy days” will keep unforeseen costs from breaking your bank account. Putting a small amount of money into this savings account can help cut the paycheck to paycheck cycle, and pay for a new microwave if yours decides to stop working.
Save for Planned Expenses
Saving money for that annual family vacation can never start too early. Planning for things like birthdays and Christmas helps eliminate last minute panic and putting dents in other expenses. Cut back somewhere else if you need extra money. Perhaps your family goes out to dinner and a movie once a month. Make the meal at home and rent or stream a film online and watch it together instead.
Budgeting is never easy or fun, but it’s necessary to maintain success in life. Some people are better at it than others.
Hopefully, the tips above will assist in improving your spending and save you money. Maybe it’ll help you finally take that family vacation to Disney World, or just buy Christmas presents without it making you go bankrupt.
If harsh winters plague the area you live in, it might mean the difference between struggling all winter or maintaining comfort in the security of your own savings account. Budgeting is a great way to keep your family’s lifestyle afloat, no matter what may come your way.
