Knowing exactly what money you have available to spend on your families everyday needs is vitally important and planning such spending is therefore imperative. Firstly you need to prepare your family budget, which is basically a document that lists your families income and outgoings. To do this follow these easy steps:
1) List your family income, which could be:
2) Now list your family outgoings, which could be:
household utility bills (gas, water, electricity)
pets (food, vet bills)
one-off household costs
other finance costs (car leases etc)
other travel expenses
leisure costs (cinema etc..)
3) Now analyse
So you will now have established whether your familes income is more or less than your families outgoings. Obviously you want it to be 'more' than your outgoings but the chances are that it wont be. Businesses aim to have what is called 'headroom', which basically means that each month there is cash left over after all outgoings have been paid. You need to aim to have exactly the same. Ideally try to make sure that you have at least 5% of your income set aside each month. So, if you have worked out that your total income is £1000 per month you need to make sure that £50 of this is not being spent on your regular outgoings (this is now your Headroom Cash).
It is not enough to do this once. You need to keep on reviewing your families budget every month as circumstances change.