Maintaining Family Budgets

Setting up family budgets is a matter of deciding what your income is and what money will be going out due to variable and fixed expenses. In addition to this, it is also important to prioritize your spending so that you have the money to take care of things that rank in importance to other things you can spend your money on. Prioritizing helps you keep on track and stay focused on your financial goals. Also, when hard times hit, you know what you must spend money on and what can wait.nnYou need to make sure that you have money for things that are critical to survival. These can include items such as food, transportation to and from work, savings, education, and medical care to name a few. Of course, food is a priority but take a close look at your family’s eating habits and cut back on fast food carry-outs and eating in restaurants. These can blow your food budget real fast. Many large grocery stores have specials on certain food items and you would be wise to search out these bargains.nnOf course, transportation is necessary to get to and from work and other things like school activities but you should carefully scrutinize your transportation situation. If you are having tough times then carefully ask yourself if you need two cars for both spouses. An automobile is a terrible financial resource consumer. Ask yourself if you have reliable mass transportation available in your city to get you to and from work and keep only one car. nnMedical care can be another money drain even with insurance. Sometimes, if you carefully weigh the health of your family, you can save money on health insurance premiums by taking options with higher deductibles. You will need to have the deductible ready to go should you need it but if you carefully analyze your situation you could perhaps reduce your premiums.nnHaving a Buffer in Your Family BudgetsnnWhile none of us like to face it, the truth of the matter is that sometime in our lifetime we will hit a dark cloud and things will go the wrong way financially. This could be any number of things, including the loss of a job, a major medical disaster with no health insurance, or a sudden temporary disability. Each family and individual needs to have an emergency fund that can be turned quickly into cash for these emergencies. There are varying recommendations out there but it seems that most recommend three to six months of cash reserve so that a family can weather the storm.nnThat could mean having anywhere from $10,000 to $20,000 in cash possibly just sitting in an account ready for access should an emergency arise. Most of us typically do not have this kind of money lying around but it is a goal to try and achieve. The best advice is to start saving for your emergency fund now. Even if you only have $3,000 lying around in an account, do not touch it and use it unless it is for an emergency. Also, keep in mind that when the emergency hits, you may be cutting your expenses anyway so the emergency fund might last longer than under normal circumstances.nnIf you still find that you do not have enough cash lying around to get through then check things like the life insurance policy you may have purchased a long time ago. It may have cash or loan value and this is a good source to get a quick low interest loan. However, beware that it is difficult to pay the loan back usually and it reduces the benefit value of the policy. Another source of quick cash is if you have any stocks that have a reasonable share value. Keep in mind though that you will pay capital gains taxes on stocks based upon their value at the time of the sale less the price you purchased them for.nnKeep these tips in mind to have a more balanced budget.