If you normally put of budgeting as a boring task then things have to change when you have a baby. While having a baby is very exciting as a couple it may have a big impact on your household income and out goings. You might be a two income couple who struggle to save any money and wondering how your going to cope when you get to one income and an extra mouth to feed. The good news is that regardless of your income you can make some smart moves to make a baby more affordable and leaving you with fewer financial worries so you can focus on the important things like your new baby.

Calculate your current living costs: The initial step in budgeting is to list down all the expenses that make up your costs to live right now, without your baby. Ensure that all expense items are included. The monthly bills you pay regularly are often the easiest place to start: rent or mortgage, car, groceries, power, water, phone, cable, Internet, fuel, membership dues, etc. Once these amounts are written down, start listing expenses on other things. It does not matter how small the expense is: these little items add up. Sum up your total spending each month.

Establish your income: You will want to know your total household income. It should be easy to determine all the money going into your bank account. Deduct your expenses from income, and the remainder will be the baby budget. A baby may require about $800 a month or nearly $10,000 in the first year of life. Do you have enough money left over? It is also important to consider differences in income before and after birth. If you have a two-income household, there may be an income loss when the mother has to take time off for the baby. You’ll need to decide on the length of time for that period.

Cut unnecessary expenses: If the baby budget is not enough, look at items that can be eliminated, particularly non-essential spending. A lot of people spend nearly a third of monthly income just for dining out. Saving money on this item will go far.

* Pack a lunch. Cook at home instead of dining out. Make coffee every morning instead of getting it from the coffee shop.

* Fruitful areas for trimming are usually the Internet services, telephone and cable. Downgrade your cable package to a lower-cost package. Does it really matter much if it takes a few minutes longer to get connected online? There could be a $15-$30 difference in monthly fees. If you can reduce the features on these three services down to essential needs, you might save up to $100 a month; that’s $1,200 annually.

* Consider switching to low-gas-mileage cars (but make sure it is child-friendly). Driving a small and more efficient car can save money on fuel, loan repayments, servicing and even your insurance.

* Some baby things should be bought brand-new, such as baby’s crib and car seat. Baby clothes and maternity clothes do not need to be brand-new. People don’t need all the baby gear forever so there are loads of fantastic items in secondhand stores, garage sales and online auctions. Majority of maternity and baby items have been gently used for short periods of time (maybe 3-6 months) and quickly outgrown. There may even be unused items, because new moms often receive an overabundance of them as gifts.

* Be a smart shopper. Go for on-sale products instead of sticking to brand names and favorite products you automatically pick but don’t know exactly why. Many people shop for groceries once a week, buying more than 50 items each time. If you are able to substitute even half of your items for supermarket own brands or cheaper brands costing on average $1 less each then you could be saving $25 every week. This adds up to $1,300 after 52 weeks in a year. The point is for you to start paying attention to prices and key qualities in a product, and not just the brand. This will eventually make the habit of saving money second nature to you.

There are many spending habits you can change. You’ll just have to find out where and how much savings you can generate.

Set up baby’s monthly budget: In the first year of life, you’ll need between $600 and $800 each month for the new baby. You can raise this by saving money over time or revising your budget to make funds available for it every month. You will have to think of essential items the baby will need including expenses before birth (prenatal pills, doctors’ appointments) and after birth. There will also be expenses for delivery and after-birth care. Budgeting some money for health insurance will be desirable; if you do not have health insurance, you will have to plan how to cover these necessary payments.

Start saving money: It would be desirable to start saving money in a high interest savings account even before a child is conceived. You will need a lot of money during pregnancy and the first year of life, and will probably use up most of what you save ahead of that time. But you will find that saving money ahead is also a good way to build up savings for the baby’s future. Saving money unspent for the month in a separate high interest savings account gives you a pool of funds for emergencies, unexpected costs, and even for the child’s future.

The most effective type of budget planner worksheet is usually the simplest one. Whether you choose to create it in a note book, accounts ledger or computer spreadsheet, by applying the K.I.S.S. principle (Keep it simple stupid), you will be well on your way to achieving full control of your household budget.

Now when I say keep it simple stupid I am in no way implying that home budgeter’s are simple or stupid, far from it. Any woman who can proof read homework, make lunch, act as personal assistant to 3 kids under 10 and 1 over 30 all at the same time is pretty smart in my book. The point is that it doesn’t need to be complicated.

There are many budgeting systems available these days, but often they are quite complex and have many bells and whistles, flow charts, pie charts and complex methods of analysis. These are great if you need all these features or are planning to take over the stock exchange, but for most of us we simply need to keep on top of our household income.

So, here are the ten steps you take to create a really simple yet really effective budget planner worksheet.

Open 3 bank accounts. Everyday Account, Expense Account and Savings Account. Make sure your income is paid into your Everyday account and that it is easy to access. Identify your budget cycle; do you have income every week, fortnightly or monthly? Write down your total combined household income in each income cycle Under the heading of Everyday Account, make a list of the expenses you usually cover straight out of your pay, such as fuel, groceries, lunch money etc Under the heading of Expense Account make a list of the things you are billed for, such as phone, power, insurance etc. Look over your previous bills to get a clear idea of what amounts you pay to cover these bills and when you usually receive them. Calculate an approximate annual total for each bill and an overall annual total for all bills If your income cycle is weekly, divide your total bill figure by 52. If your pay cycle is fortnightly divide the total bill amount by 26 and if your pay cycle is monthly divide the total annual bill amount by 12. You now have a ‘set aside figure’. This figure is the amount of money you transfer to your Expense Account every pay cycle Now you know what your total combined income is. From this income figure you take away the total of the everyday things you cover straight out of your pay. Next take away the set aside figure you have calculated based on your usual bills. What you have left with is your ‘play money’, so transfer some of this to your savings account and keep the rest for your pocket to cover those little things like bread and milk throughout the week.

The above formula for a budget planner worksheet is based on that simple concept that what comes in needs to be more than what goes out, and you just can’t get any simpler than that.

At first you may find that your set aside figure needs to be quite high to cover your bills because if you have never budgeted this way before you will find yourself in catch up mode for a while. However, as you get into the habit of allocating your money to these three different accounts each and every pay cycle you will soon find that your set aside figure can be reduced and will even out.

As long as you have the discipline to stick to this simple system you will soon discover that your bills are always covered before they even arrive.

You can think that it is easy to recognize excessive personal spending when you observe someone buying goods and services according to what appears to be an extensive appetite of wants. This observation maybe true, but is at risk of passing judgment, and perhaps not having enough information about the person being observed. A better approach is to evaluate personal spending within the context of fulfilling a desired goal and then decide if the spending pattern can support the resource need to accomplish the desired goal. The following is a basic plan that can quickly help you to determine excessive personal spending.

1. Establish a future reference by visualizing your desired position three to five years from today. It is best to establish the long-term position first before the short-term in order to remain focused and motivated

2. Write down this visualization in a statement titled”Vision Statement” and include a projected emotional response as you journey towards fulfillment

3. Write an achievement goal that is essential to realizing your vision within each of the following areas such as: Social – e.g. Marriage, or Children or a major vacation or a visit to at least three continents; Educational – To receive an advanced degree or certificate or Career change; Financial – Double household income or Start a business or Establish a fund for your children education; and Personal health -Actively engaged in the practice of “good” health habits

4. Project the dollar amount that will be needed to achieve your goals and realize your vision within three to five years

5. Determine your current spending pattern/month to see if you will have the resources or if you will need to make adjustments in order to realize your vision in three to five years

This step by step method allows a self-evaluation for determining your spending pattern and provides data for you to decide if you are spending excessively.

Budgeting your income and expenses can be a challenging and time-consuming process, what with all the numbers involved. But there’s no other way you can plan your family’s spending than budgeting. Fortunately, a home budget spreadsheet can eliminate the headache and sweat that are usually involved in budgeting. You can find home budget spreadsheets on various websites; some of them come with tips and instructions on how to use them for planning your household income and expenses.

So how do you make a family budget using a home budget spreadsheet? First, open the spreadsheet program in your computer and then make four pages with four categories (budget, income, utilities, and debt).

In the Budget page, list all your income, debts, and utilities. The cell in each item in the Budget page will be linked later to the total cell from the respective page of every item such as income and utilities.

Go to the Income page. Type in all your income sources such as salary, bonuses, and commissions. On the column next to the list of sources of income, place the respective amounts. Get the sum of the income column and then link the total cell to the Budget page.

The Utility page contains all the payments you have to make, except for loans and debts. Examples of items to be included in the Utility page are power, water, transportation cost, groceries, and clothing. Create three columns for the company name, deadline of payment, and estimated amount to be paid. When you receive your billing statement, change your projected amount to the actual amount as indicated on the statement.

List all your debts in the Debt page of your home budget spreadsheet. Include the deadlines for payment, minimum monthly payment, interest rates, and the sum of all debts. If you plan to pay the smallest debts first, arrange your list of debts from the smallest to the largest.

Finally, return to the Budget page that now has the total amounts of every page in your spreadsheet and then deduct your expenses from your income.

What is a family budget?

A family budget is a set of instructions or laid-out-in-advance procedures which act as a guide to paying your bills, buying things members of the family need, putting aside some money as savings, and so on and so forth. Nobody in your household should spend any money, outside of an absolute emergency, whenever doing so would cause the household to go over the family budget.

The family budget tells you your financial spending and consumption limits for a given period of time, usually for one month that based upon the following:

Your household’s total income, your debt load (including taxes), your regularly occurring expenses such as your electricity or phone bill the lifestyle you want to maintain or realize

All family budgets are intended to help you realize your goals and take care of all immediate needs, such as food, for yourself and your family while at the same time getting your household to make more money than it spends.

What makes a family budget successful?

The cornerstone of a successful family budget, or any budget, is by making sure that more money is brought in than goes out. You cannot realize your financial goals and lifestyle dreams if you and your family members are spending money that you don’t have. If you are living in debt, you must assure that your household income is greater than your consumption expenses every week, month, or yearly quarter. The most important goal of creating the family budget is to get yourself out of debt, and to do so as fast as possible.

How does creating and then maintaining an effective family budget work?

It all begins with preparation and thinking ahead. The word economics literally means “household management” in its Greek root. Apart from making sure all the people in the house gets along decently, the financial part of household management is the most important part.

You should draw up a plan of expenditures and you must follow it. If you do it right, you should be able to maintain your current lifestyle, and have enough money for recreation and leisure (which are important to mental and emotional health). But, maintaining this budget could mean changing certain spending habits. If that’s the case, you and all your family members who are working will need to comply with the family budget.

At least for most of us, money is limited. This means you need to prioritize how you spend your money. When most of your immediate needs are taken care of, your family budget will guide you to pay down your most pressing or outstanding debts first. For the vast majority of people, this will be their mortgage or credit card debt.

Pay Yourself First

Creating a family budget, however, also works on the principle of “paying yourself first”. This means that you put aside as much money as your budget permits toward savings and investments. Your “investments” might be a money market account, CD at your bank, or it might be some stock investments made with the guidance of a financial professional. But at any rate, you must make sure that you take some of your income off the top before you get down to the business of paying the supermarket for your food and then paying the bank for your mortgage.

A Household Budgeting Tool that Works

United First Financial has a proprietary software program called the Money Merge Account This unique software is designed to help you calculate with pinpoint accuracy how to balance your household finances to achieve the maximum debt pay down per period while still meeting all of your household’s financial dreams and goals. The Money Merge Account is an incredible tool that anyone serious about household budgeting should look into.