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FOUR STEPS TO DEVELOPING AND STICKING TO A FAMILY BUDGET

If you're trying to develop and stick to a family budget, you've likely heard all the common advice on how to cut expenses. Pack a lunch and eat in rather than dining out. Brew your coffee at home. Use coupons. Watch for sales. Rent movies rather than going to the theater.

All these tips (and others that can be found by doing an internet search for "ways to save money") will help you reduce your monthly expenses, but how do you actually develop and stick to a family budget? How do you turn good intentions into action with the minimum amount of time and stress?

Follow these four steps to get you started:

(1) Determine your monthly net (after tax) income.

If you have a regular monthly salary, this step will be easier for you than for someone who earns an hourly wage. Your pay stub will tell you both your gross income and your take-home income after taxes and deductions such as union dues have been removed.

If you are not salaried and your income changes month-by-month, you can still create a budget. On the last weekend of each month, estimate the number of hours you expect to work the following month and multiply that by your hourly wage. Deduct the average amount that you lose to taxes and other fees, and you will have your working income. Remember to underestimate your income and overestimate your deductions. Better to have a pleasant surprise at the end of the month when you've earned more and lost less to taxes than the other way around.

(2) Create a budget template.

A budget template is simply a chart that has columns for your expenses, what you budgeted for them, and what you actually spent on each of them. To make your job easier, customize a ready-made template like those provided by Dave Ramsey's Financial Peace University or for Microsoft Excel.

By customizing a ready-made template, you also ensure that you don't accidentally forget to include an important category.

(3) Fill in the values for your estimated expenses.

This can often be the most complicated part of developing a budget if you're not sure what you have been spending or what you should be spending on each category. To get a quick idea, you can visit an automatic budget creator. All you have to do is put in your monthly net income, and this tool will provide a guideline for what you should be spending in each major category (e.g. housing, food).

For the first couple months, consider your budget a guideline rather than an unbreakable rule as you keep track of your actual spending and adapt your budget or your spending habits as necessary. This is where all those useful tips on how to save money come in handy.

(4) Take a long-term view.

Whether or not you take a long-term view determines whether or not you will be able to stick to your budget.

First, think about what major expenses might arise in the next six months and build this into each month's budget.

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