Need help bringing your own finances under control? If you constantly wonder what is happening to your paycheck, coming up with a budget may eliminate some of the guesswork.
Developing a budget means you have to know exactly how much money you have coming in each month and how much you're paying out toward bills and other expenses. Although this task takes some time and effort, the result may be better control of your finances.
Here's a five-step process to create a budget for the future:
1. Examine your past.
Start by looking back through your check registers for the last year. Make a list of all the places your money went -- mortgage or rent, utilities, phone, cable TV, food, insurance, taxes, entertainment, car and home repairs, and so on. You'll also want to track how you spent any cash withdrawals. Take a look at your credit card purchases and itemize them as well. Are there any surprises here, places where you spent considerably more than you would have guessed, or would have preferred? This is the first place to start cutting back and adjusting your spending.
2. Make a list of all your income sources.
3. Write down all your deposits over the past 12 months.
4. Write the monthly payment next to each expense category. For variable expenses such as food and utility costs, find the average cost over a certain time period. For semiannual or annual expenses, divide by six or 12 to get a monthly cost.
5. Develop a budget based on these figures, comparing them to your actual expenses over the next few months. If there's a difference between the amount you budgeted for an item and the amount you spent, adjust your budget or find a way to reduce spending for that item.
You can also consult a financial planner to help you establish a family budget. Notably, the First Command Index consistently shows that working with a financial planner helps families feel confident in their financial future.
This is especially true for military families. When asked about their feelings of financial security from month to month, 49 percent of military families say they feel "extremely or very secure" with their financial advisor and budget, compared to 27 percent of the general U.S. population.
Additionally, 48 percent of military families say they feel "extremely or very confident" in their financial future since working with an advisor, compared to 21 percent of the general U.S. population.
After years of living in a consumption-fueled economy, Americans now show encouraging signs of a fundamental, long-term shift in their approach to personal finances by turning away from unchecked consumerism and embracing the traditional values of personal responsibility, prudence and self-reliance.
If you need more advice about establishing a family budget, visit Military.com's Banking and Saving page.