Did you know that the average person has approximately $5,000 of revolving credit card debt? With an average interest rate of about 20%, that makes for about $1,000 being almost literally thrown away each month if you only pay the minimum. The key to overcoming debt is to budget your spending so that you can eliminate the debt quickly.
Fortunately, budget tips for families are one of the most popular subjects among bloggers these days. There are a lot of resources online that can help you and your family develop a budget and save money, and here are three tips to get you started.
- Establish a family monthly budget.
You can use family budget software, family budget templates, or even a notebook if that is easiest, but the important thing is to understand how much money you are starting with, and where it is going each month. Here are average monthly expenditures, according to a Consumer Expenditure Survey.
- Housing costs add up to 26%
- Transportation costs add up to 12%
- Food costs add up to 10% and about 6% of that being food eaten at home, and 4% being food eaten out.
- Personal insurance and pensions add up to 9%
- Healthcare adds up to 5%
- Entertainment adds up to 4%
- Clothing and services add up to 3%
- Everything else adds up to 8%
How do your finances compare? If you are spending more than the average, then it may be a sign that you need to look into cutting spending in that area.
Battling debt starts with saving money so that you can apply it to eliminating those debts faster. The entire family can help out in this area by encouraging one another to be thrifty, make sure lights get turned off when not in use, and even cut down on washing dishes by reusing a glass or two, or being mindful of how many bowls are used to make a meal. Consider drying your clothes on a clothesline when the weather is nice, and eating in more often. Groceries are one of the first areas that can typically be trimmed down, by shopping for cheaper items, and focusing more on making meals from scratch to cut down on the expense of over-processed and over-priced ready-to-go meals.
Quick budget tips for families can only go so far. For there to be long-lasting change, then habits and behaviors have to evolve. Personal finance articles and personal finance tips might help you realize that you could get a better rate on some of your loans, or cut back on car insurance costs. If you are interested in improving your knowledge of personal finance, you may be able to take a finance course online, or a local nonprofit might be offering courses for free.
These three budget tips for families will be a good start to get your family on track for bigger savings, and less debt. As you start to see that restraint and making smart decisions is helping, you will be encouraged to find more ways to save money and better manage your finances.