Figure out your income. In order to come up with a budget, it is important to figure out how much money you have coming into your family's household each month. This must include your income and your spouse's income along with any other steady income--such as social security or child support. Gather both your spouse's and your recent paycheck stubs. If either of you is paid weekly, have 4 recent stubs. If either of you happen to get paid bi-weekly, have at least 2 stubs per person. If one of you is paid once a month, have 1 paycheck stub on hand. Gather any other income documents you may have.
Gather bills. You've already figured out the money coming in, now you must figure out how much money you have going out to pay bills and other expenses for your family. Gather all of the household monthly bills including a cell phone bill, an electric bill, gas receipts, car payment stubs, the cable bill and mortgage or rent invoices. Look for specific expenses relating to your children such as childcare or school tuition.
Assess the extras. Throughout the month you, your spouse or your children may participate in activities that cost money. This includes after school clubs, Girl Scouts or gym memberships. Come up with a monthly sum that your family spends on eating out, clothing and activities. Don't forget to include any extras such as morning coffee at Starbucks or drinks out with friends.
Total it all up. Once you've gotten the paycheck stubs and monthly bills gathered up, it's time to figure out a grand total. Use your calculator to add up the monthly income coming into your family's household. Write the number down on a piece of paper and label it as "income." Use the calculator to add up all of your family's expenses. Write that number down on the same piece of paper and label it "expenses." Use your calculator to subtract your family's monthly expenses from the monthly income. This will show you whether your family is within the parameters of the income or not. If a negative number comes up, it means your family is overspending, and the budget must be reassessed along with cutting out things that aren't necessary. If a positive number comes up, your family's expenses and living costs are within the realm of the monthly income. Congratulations!
Figure out your budget. Once you have figured out whether your family is overspending or within its limits, it's time to figure out a budget. If your family is overspending, expenses need to be modified to conserve money so spending is within the monthly income range. Start by cutting out your family's optional expenses, such as regularly dining out or daily coffee out. If this doesn't give enough money to be within your family's monthly income range, assess all of the expenses. Decide which ones can be modified. Designate a specific amount of money for each expense. This becomes your budget.
Put your family's new budget into effect. Once you've come up with a new family budget, it's time to do the real work. Put the budget into action. Track your family's expenses and spending habits for a month. If a commitment has been made to cutting costs on dining out, do not exceed the amount of money that is designated for that specific expense. Remember, the key to making your family budget work is following the guidelines which were set. After the month has passed, assess the monthly expenses. See if your family was able to stay within the budget. If your family exceeded the budget, figure out why and modify your family's budget further to conserve more money. Put the new family budget into action in the upcoming month. Good luck!