Quick Tips to Set Up a Family Budget

01 Create a Budget

02 Set Financial Goals

03 Get Out of Debt

04 Lower Your Taxes

05 Plan for Financial Emergencies

06 Control Spending on Food

07 Budget for Travel

I make a budget, I focus on two kinds of amounts:

 Planned amounts- what you think your income and expenses will be.
 Actual amounts- what the income and expenses actually were.

I tend to use these general categories:

 Tithes and giving – I wrote about tithing earlier.

 Debt payoff – Paying off any kinds of debt should be a high priority. It will free up your income for
future opportunities when you are not burdened with the monthly payments and interest.
 Home – Rent or mortgage payment, insurance, property taxes. You could even include home
repairs and furnishings in this budget category.
 Utilities – Monthly bills for water, electricity, gas, phone, internet, cable.
 Car – Car payments, gas, insurance, repairs, registration, inspection, tires.
 Healthcare – Doctor visits and prescriptions.
 Food – Groceries and dining out. I separate the two because groceries are essential, but eating
out is an indulgence.
 Personal – Clothing, hair cuts, wants, entertainment.
 One-time or big expenses – I set aside money each month for any big-ticket items before
buying them.
 Grace – A buffer for mistakes and unexpected events helps you stick to your budget.

How a family should spend every month

Here’s how much a household income of Rs 1 lakh per month should be allocated under different heads.

Essential expenses: 60 % of the income should be spent on these essential items.

Food and groceries : 18.8% : Rs 15,000
Healthcare (including insurance): 4% : Rs 4,000
Life insurance : 3% : Rs 3,000
Housing : 20% : Rs 12,000
Utilities : 4% : Rs 4,000
Education : 6% : Rs 6,000
..
Transport : 8% : Rs 8,000

PLUS

Clothing : 7% : Rs 7,000

PLUS

Savings: 20% should be invested for financial goals

PLUS

Discretionary items: 20% of the income can be spent on discretionary items.

Entertainment : Rs 10,000 : 3%
Communication (including TV, internet): Rs 3,000 : 3%

TOTAL : Rs 1 Lakh : 100%

Personal budget
A personal budget or home budget is a finance plan that allocates future
personal income towards expenses, savings and debt repayment. Past spending and personal debt are
considered when creating a personal budget. There are several methods and tools available for creating,
using and adjusting a personal budget. For example, jobs

Tools
Pencil and paper
Spreadsheet software
Money-management software
Money-management website
Spending-management software

This are the tools wher we can prepare a budget

Indian parents spend Rs 12.25 lakh on
children’s education, Hong Kong leads with
Rs 85.67 lakh
About 89% Indians fund their children’s education, 79% want them to do postgraduation
and 89% are willing to ‘make sacrifices’ for their kids.

Postgraduate degrees are necessary for jobs, feel 87% Indians, fourth highest among all
surveyed markets.