Sadly, very few people were ever taught how to budget household expenses. I think this is, in part, why so many families today are struggling with debt. It's also why keeping the household books was such an important part of the homemaker's education in days gone by - and why the Proverbs 31 Woman was praised for being a good steward of the family finances.
Possibly the biggest obstacle people face when trying to create a budget is that they have no idea where their money is currently going. If you don't know that, there's no possible way to create a budget you can actually stick to.
So the first step in creating a work-able budget is to keep track of every single cent that goes in and out of your life. You don't necessarily have to do this forever (although doing so will give you absolute knowledge of your fiances), but you do need to do it for at least two or three months.
Why every cent? Because until you do this, you really have no idea how much you truly spend on coffee each month, or household cleaners, or library late fees...In other words, lots of "mysterious" things eat up your money. Seeing these figures in black and white helps us become better stewards of our money, while at the same time making it possible to estimate accurately for budgeting purposes.
So grab yourself a small notebook - small enough to easily fit in your purse - and a pen or pencil to attach to it. On the first page, write the month, top and center. Drop a line or two and write, on the far right hand side of the page, "In" and - a few spaces to the right "Out."
Now every time anyone in the family spends money (whether it be cash, debit card, check, or credit card), write down the date, what was purchased, and (in the "Out" column) the exact amount it cost. If you like, you may also make an abbreviated notation as to how you paid for the item. (For example, you could put "cc" by the item a credit card was used.)
It's important to be as specific as possible in your notations, so if for example you go to Target or Walmart and buy groceries, beauty supplies, and cleaning supplies, you need to take the time to add those items up separately. For example, you might note that you spend $52.10 on groceries, $9.99 on beauty items, and $24.99 on cleaning supplies.
I recommend making these notations as soon as you get in your vehicle. If you wait until you get home, you may loose your receipt and are unlikely to remember exact figures. You'll also have to remind your husband and children to bring home receipts for anything they purchase; I recommend sitting down every night with these receipts to add them to your book. If you put this task off, you're likely to forget items - and therefore won't get an accurate picture of where your money is going.
The final part of this process is to make a record every time money comes into your life, putting it in the "In" column.
At the end of each month, sit down and total your columns.
"And the Lord said, 'Who then is the faithful and sensible steward, whom his master will put in charge of his servants, to give them their rations at the proper time? Blessed is that slave whom his master finds so doing when he comes. Truly I say to you that he will put him in charge of all his possessions."
Luke 12: 42-44
Luke 12: 42-44
Read Part II of this series.