Do you need a budget?

Every financial planner will tell you that using a budget is a wise decision.  Knowing where your dollars go will help you to keep more of them in your bank account.  As you may have read, we give our kids an allowance in order to teach them at a young age about money, and we have a budget for our family as well.  We follow the same advice we give to our kids: Spend Some, Save Some, Give Some. And then we are very specific about how we spend that some.

There are some great tools to help you set up a family budget.  Dave Ramsey is a well-known money guy, and he has a ton of sage advice for planning a budget and getting out of debt.  Quicken is a great tool to use to track your spending.  And Mint is an online, free finance tool.

We also use a few budget tricks that help us stay on track every month.  

Average out your bills and put aside the average every month.  

That way you can pay a higher utility bill in the summer or winter without throwing your budget off, and you won’t be shocked when your semiannual car insurance premium comes calling.

Give yourselves an allowance.  

Everyone should have an amount of money to spend every month that they don’t need to explain to someone else.  If you want to spend yours on a Starbuck’s every day, or save up for a leather jacket, you should be able to have some money that doesn’t fall into another category. Just make sure you stick to the budgeted allowance every month.

Put aside for contingencies.

After you have figured out your budget, try to put a little bit aside every month for the unexpected expenses that come up. Not emergencies exactly, but thing like car maintenance, home maintenance, etc.

As always, this is just what we do. Feel free to use what you can and ignore the rest.