A Guide to Reorganizing the Family Budget

With the economy the way it is, almost all of us are looking for ways to cut back on our expenses. The very first thing you should do is to make a new budget. You should have your mortgage, utilities, cell phone, medications, cable, internet connection and anything you have to make a payment to every month. We will call this Group 1. Next, start a Group 2, listing of all of your credit cards, car loans, or any other outstanding debts that you have. Entertainment and clothes aren't even going to be listed right now. Finally make a Group 3 with have groceries and gasoline listed.

Group #1 is the expenses that have to be paid every month. You need to look at the list closely and decide if you really need everything that is on the list. For example, do you have both a cell phone and a landline phone? Do you really need both? Get rid of the one you use the least. This is only a temporary fix. You can get it back later on when things are looking better. Now, for utilities, start cutting back on water use. Turn off the water when you are brushing your teeth. Fill a glass with water to rinse your mouth, there is no need to leave the water running. Take shorter showers and tell others in your household to do the same. Turn off lights when you are going to be longer then 15 minutes of needing it again. Turn back your heat; wear warmer clothes when you are inside. Wrap up in blankets when you watching TV, do whatever it take to cut your heating bill. These are little things you can do without much effort to effectively cut costs. The easiest way to keep track of this is to open a separate checking account titled household account. Take the total amount of Group 1 bills and total them, divide that by the number of paychecks you get each month and put that amount in your household account. Don't use the money for anything else; these are things that you have to pay.

Group #2 lists the amount of the payment, then the total balance and the date it is due. When you start seeing how little the total balance is going down each month you will see why all financial advisors are saying to payoff your credit card bills. It may not be possible to pay extra on the cards at this time, if you can put as much extra on the one with the highest interest rate. You can try calling the credit card companies and they may work with you letting you make lower payments or lowering your interest. It is worth a try if you can't make the minimum payments. Open a second checking account for these and you will know when you have extra to pay more on one of them. You will do the same figuring as you did for group 1 in finding out how much money you need to deposit monthly in this account.

Group #3 is last because this is the one that you can work with the most. For car gas try car pooling. Change your own oil or have a family member do it. Have the kids ride the bus to school. Anything you can think of to save on gasoline. Groceries require work on your part. Try going to the store on Sunday or Monday and know the food is going to last all week. If you go on a weekend when everyone is home the food tends to be eaten faster. You will need to go thru all the grocery store fliers to find out what is on sale that week. Then you will need to buy a Sunday Newspaper that has coupons in it. The newspaper is one expense that usually will pay for itself because of the coupons. Match the coupons to sale items. If you live in a town where they have double coupons be sure you stock up on items then. Walgreens, Rite-aid and CVS have very good weekly specials. If you watch what they have on sale and match to coupons you can sometimes get items for free. Make sure you keep your register receipts and send in for any rebates that you can. Cook casseroles, ham & beans, vegetable soup, and things you can make a quanity of. Using a crock pot is great for putting things in it in the morning and then it will be ready for supper. Also, is good if you have household members who eat at different times. And it is okay to have a peanut butter sandwich and open a can of tomato soup once a week. If you love pizza, then get the frozen pizza that is on sale that week. It will help with that impulse to order out. Using coupons and shopping specials should allow you to cut at least 50% off your grocery bill, depending on what you buy. For this group I suggest you keep out cash. You won't spend as much as if you are using a debit card. Plus, you can see how much, if any, that you have left over.

For Christmas gifts, don't worry about it. Stressing yourself out isn't going to help. Make gifts for people. There are many sites on the internet that have crafts listed. If you knit or crochet, you can make warm scarves, hats, blankets and all kinds of things. If you love making candles, they make a very nice gift. Have a fun family day of baking cookies and making candy. Start buying the ingredients now while they are on sale. Everyone likes to get a plate full of good things to eat, and you won't need to buy these things for your own household, but you'll still have the treats.