# How to Prepare a Simple Family Budget

The actual task of preparing a budget is easy. The hard part will be the tug-of-war you and your significant other have over the bills. Both of you must compromise if you want your family budget to work. For example, you may need to give up some of your daily lunches. She may need to cut back a little on her monthly book buying. Whatever the case, discretionary spending is often the place you start when preparing a simple family budget.

## Set a Savings Goal

Sit down with your partner and decide how much you would like to save per month. Make \$300 per month your savings goal, for example. Construct your budget around that goal.

Get out copies of each of your pay stubs. Add your net salaries together to determine how much money you each earn each month. Add any additional income that you regularly earn every month. Write your monthly income figure at the top of your notepad.

Create an expenses section on your notepad under your income figure. Draw a line down the center of the notepad. Label one section "Fixed Expenses" and the other Variable Expenses." Take out all your bills and your bank and credit card statements. Enter bills that stay the same each month under "Fixed Expenses." Write down fixed expenses such as your mortgage, car payment and insurance. Jot down expenses that vary each month under "Variable Expenses," including your electric, gas, entertainment, car repair, grocery and clothing expenses. Add each column up separately, then add your variable and fixed expenses together to figure your total monthly expenses.

## Calculate Leftover Amount

Subtract your monthly expenses from your monthly income to determine how much you have left over each month. Compare the amount you have left over with your monthly savings goal. Subtract \$200 from your \$300 monthly savings goal, for example, if you have \$200 left each month. Plan to cut an additional \$100 from your monthly budget, as you would be \$100 short of your savings goal.

Look at your variable expenses such as groceries, entertainment, clothing expenditures and gas. Decide how much you can deduct from each of your variable expenses to save the extra \$100 or whatever you need to reach your monthly savings goal. Cut \$50 from groceries, \$25 from entertainment and \$25 from your clothing expenses each month, for example, to achieve your monthly savings goal.

## Plan Spending

Plan how you will cut your chosen variable expenses. Buy fewer name brand products, for example, to save the extra \$50 on groceries. Form a carpool with your work buddies to save on gas.