Every family should have a budget, regardless of their financial situation. A budget tells you exactly how much you received and the monthly amount spent on absolute necessities such as housing, food, utilities, insurance, transportation, and health care. But what about the future?
This is another place where a budget comes in handy. When you have allocated some of the weekly household income to necessities, what is left is your discretionary spending amount. These are the funds you have available for short-term expenses or long-term investments, such as your children’s education, and your own retirement funds.
When kids get older and need more spending, there may not be much left. But even 5% of your income can be a good start to an education fund. Extras like bonuses or maybe half the amount of an increase will increase those future savings. Since they are not in the budget initially, they will not be missed and you will always have a portion of the unexpected income to add to your regular budget.
Consider financial advice from your banking institution or professional. These are often the best sources for learning how to make the most of the dollars you need to save and how to get the most out of the future benefits they will earn for you. One of the most important money-saving activities for any family is avoiding debt. There is nothing more damaging to the financial health of your family than a pile of debt that accumulates every month.
Take the necessary steps to free yourself from debt and see your free cash flow skyrocket.