Budgeting to Succeed

You probably end up empty-pocketed by the end of each month as you keep no track of your expenses. But, being a wise and clever woman that you are, you need to get organized and maintain a household budget.

Women are often presumed to be bad with money. But then, one has to successfully maintain the household budget and this can only be done by cutting back on some extra expenses. This feature helps in cutting back expenses and preparing standbys to help a woman through tough times.

On the basis of average American income that comes out to be $431 per month, we spend 10 percent more than we earn each month.

And, using debit cards, credit cards, automatic deposits, and wire transfers, we hardly even see our money now. Welcome to the cashless society. But women feel that it helps them in handling expenses better. It's easier than ever to spend, spend and spend!

But there are better ways of spending. Taking the time to make a household budget can help you meet your short and long-term goals as a good homemaker and a responsible consumer too.

According to Gallup Poll conducted in America in November 2008, 55 percent of Americans worry that they will not be able to maintain their standard of living. Whether road tripping across the country, back-to-school shopping, or the holidays will put you in debt this year is always on their mind.

What’s needed?
Keeping track of our money is the need of the hour. The good news is that expert help is available. Quicken and Microsoft Money are two personal finance programs that help in budgeting. Mvelopes and Snowmint Creative Solutions' Budget system also provide the solution.

Money-saving mavens such as Mary Hunt, Dave Ramsey and America's Cheapest Family offer lots of great ways to keep a budget, save money and cut everyday expenditure. Most of us have fixed monthly incomes, and totaling those is the first step in planning your budget. If you have a variable income, try to determine a monthly average you can count on.

“You will need a little time to develop your budget, but the investment of a few hours could literally change your financial life. It's important to get everyone who is a spender in your household involved with planning the family budget,” says Dave Ramsay, a money saving advisor.

List down all your expenses on paper or computer. Be sure to have on hand all current monthly loan payments, including mortgage, car loan and credit cards and totals for fixed monthly expenses, such as child care, membership dues, lawn care and cable service.

For variable expenses, collect invoices and receipts of your medical, utility, food, gasoline and car repair expenses from the last twelve months. This will give you an average of your monthly expenditures. You will also need records of annual or semi-annual expenses such as insurance, taxes and pest control.

Finally, tally all those little personal expenses that are so easy to lose track of, from movies and meals to toothpaste and magazines. When you've completed, you will have a frightening look at how much money is really going out every month.

Next, you need a game plan on how much you can spend without going over your budget. Be practical in your budget evaluation. How far over your monthly income are you currently? How much are you saving each month? Be sure to leave a buffer in your budget to provide for possible increases in some items, such as school tuitions, insurance, car or home repair, medical expenses and taxes. And then get ready to trim the fat.

Cutting back
When you created your budget, the bizarre monthly costs you were incurring did scare you. Distinguishing areas to cut back expenses on can reduce your monthly expenditure by huge amounts.

Jonni McCoy, family budgeting expert, says, “You need to identify less expensive ways to entertain your family and there is a need to use your credit cards properly. Women need to control their shopping spree and try haggling to cut down expenses.”

Don't be content with your current rate for natural gas, credit cards or insurance. It always pays to call your gas, insurance carrier and credit card companies to see if they have a cheaper rate program available. If not, start shopping around! Also check to see if you can reduce your phone bill by signing up for an alternate plan.

Food is one place where all women could save money with just a little planning. Cutting back on restaurant meals, making a weekly meal plan and being a thriftier shopper could easily save you hundreds of dollars a month. Sites such as Coupon Mom and The Grocery Game are great places to get started with coupon shopping.

Keep track of what food you have on hand and what you need. Stick to your grocery list and buy in bulk when items you use go on sale.

Stand Bys
While creating a household budget will help you gain control of your family finances, there are other categories that can be included in your budget that will help you through tough times.

An emergency fund will ensure there is money available to cover unforeseen expenses such as emergency travel to visit a sick family member or a sum to cover an unexpected vehicle expense. This will help you avoid the need to use your credit card, which is usually a sure way of blowing your budget.

Without a disciplined approach to spending, it is almost impossible to make headway in the reduction of debt. A budget will allow you to meet your expenses, place money into savings, and pay back debt all at the same time. It creates the framework to getting ahead financially.

Keeping track of your money is an empowering and addictive practice. If you haven’t started it yet, as they say, it’s never too late to start a good thing.