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The Basics of Budgeting
A Family Budget Doesn't Have to Hurt
By Debora Geary
Jamie Kight of St. Mary's, Ga., wanted to be a stay-at-home mom (SAHM) when her oldest son, Justin, was born. That's not a small feat to manage on a military family's income. Now expecting her second child, Kight says one of the keys to success has been budgeting.
"Following a budget has really allowed me to know exactly what we can and can't afford and still be a SAHM," Kight says. "We've really managed to live off a lot less than we ever thought was possible!"
Keeping a budget can help other families achieve their dreams as well, and the first step has nothing to do with numbers or money.
Gary Restall is a registered financial planner for AGS Financial Services in Northboro, Mass., who regularly deals with family budgeting as part of the financial planning process with clients. "The first step for individuals and families is to stop and think," he says. "What is it that they want to do? Or achieve? In other words, what are their goals and when would they like to achieve them?"
Restall suggests thinking through what you want in the next six months, the next one to five years and beyond. For example, the Kight family obviously had a goal for the next few years to be a stay-at-home-mom family.
Understanding your goals is critical to budgeting success, Restall says. "Without this goal setting or the motivation behind the process, budgeting just won't work or won't work for very long," he says. As anyone who has ever tried a budget knows, motivation can be lacking. Knowing where you are headed with your budget is the key to starting a successful budgeting habit. Budgeting becomes a tool to make your goals happen.
Once you have a sense of why you want to budget in the first place, you can start with the basic steps. Keeping a budget doesn't have to be painfully complicated. Some people use computer programs and fairly sophisticated accounting systems, but budgeting can be done in much simpler ways. There are two basic elements to budgeting: tracking where your money is going and determining how to spend it more wisely.
