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Family Financial Statement: The Family Budget1
Josephine Turner2Budgeting is planning your expenses. And this simple concept proves a challenging task for most of us. This publication should help you make a plan for your money.
What Can Family Budgeting Do?
Budgeting helps you save for the things you want. Budgets allow you to live within your income and know where your money is going.Budgets involve a system of record keeping. This can help you keep an annual record of all tax-deductible expenses.
How to Start: Categorize
Budgeting helps you save for the things you want. Budgets allow you to live within your income and know where your money is going.Budgets involve a system of record keeping. This can help you keep an annual record of all tax-deductible expenses.
It is easier to plan a budget if you break down your spending for the past year. General categories such as food, clothing, personal care, entertainment, transportation, and shelter make this easier.
The list below contains examples of these "expense groupings" from successful budgets. Use these as a guide for setting up your own expense categories.
You can combine categories such as putting all housing-related costs in one budget category.
Some categories may not pertain to you at all. An example of this is the tax category. You should include taxes only if you usually pay more than is withheld from your paycheck. You can use this money to pay the quarterly payments for the excess amount.
You should also include a savings and investment category. It is difficult to save without putting it in your budget plan. Saving takes discipline. This is true no matter whether you are saving for a new rug or your childrens' college educations. Failure to save leads to doing without or borrowing money and making interest payments that cut into money that you want to spend on other things.
Tried-and-True Guidelines
Regardless of how you classify your expenses you should observe a few basic guidelines:
- Keep similar expenses in the same category.
- Set up enough different categories so that you have a meaningful record of your expenses.
- Do not group too many different expenses into catchall categories.
- Keep the number of categories small enough to make bookkeeping simple.
Useful Family Budget Categories
1. Food
Food eaten at home
Food away from home
Snacks, coffee breaks
School lunches
Home food production2. Housing
Rent or mortgage payment3. Housing Utilities
Gas and electricity
Garbage pickup
Water, telephone
Cable, Internet connection4. Housing Operation
Laundry supplies
Storage rental
Paper goods, stationery
Postage
Hired help
Cleaning supplies
Pest control
Repairs for house
Safe deposit box rent
Household property insurance
Property taxes
Yard improvement & supplies
Home preservation supplies5. Equipment and Furnishings
Furniture, rugs, curtains
Pictures, vases, mirrors
Appliances, kitchen utensils
Bedding, linens
China, silver, glassware
Equipment repair6. Transportation
Car purchase
Car expenses: gas, oil, repairs, tires
Licenses, insurance, maintenance, taxes
Parking fees
Bus, airline tickets, train
Taxi, car rental7. Clothing
Ready-to-wear
Footwear
Cleaning and repair
Sewing supplies
Accessories
Alterations8. Personal
Haircuts
Beauty shop
Allowances
Cosmetics
Toiletries
Shaving supplies9. Health
Medical and hospital costs
Insurance premiums
Doctor, dentist
Medicine, drugs
Eyeglasses, hearing aids
First aid supplies
Treatment or therapy10. Education
School supplies
Books and supplies
Magazines, newspapers
Music and dancing lessons11. Business-Related Expenses
Union membership
Professional dues
Business licenses
Business Insurance
Tools required for job12. Recreation
Social club dues
Sports admission
Sports equipment
Movies
Vacations
Recorded music
Events
Tobacco, liquor
Hobby supplies
Cable television
Pets and supplies
Sports licenses
Veterinarian fees for pets13. Gifts, Contributions
Gifts for people outside the family
Marriage, birth gifts
Cards, wrapping paper
Flowers
Charitable donations and contributions
Church organizations14. Miscellaneous
Legal fees
Income tax
Sales tax15. Credit Cost
Interest charged on any
Credit purchases16. Life and Disability
Insurance premiums17. Emergency Fund
Savings accounts
Investments18. Child Care
Babysitters
Daycare
Reference
Turner, Josephine. 1989. Family Business: Setting up a Budget. Leaflet. Alabama Cooperative Extension System, Auburn University, AL 36849
Footnotes
1. This document is FCS5228, one of a series of the Family, Youth and Community Sciences Department, Florida Cooperative Extension Service, Institute of Food and Agricultural Sciences, University of Florida. Original publication date March 5, 2002. Revised: December 19, 2005. Visit the EDIS Web Site at http://edis.ifas.ufl.edu.2. Jo Turner, PhD, CFP, professor, Department of Family, Youth and Community Sciences, University of Florida, UF/IFAS, Gainesville, 32611
The Institute of Food and Agricultural Sciences (IFAS) is an Equal Opportunity Institution authorized to provide research, educational information and other services only to individuals and institutions that function with non-discrimination with respect to race, creed, color, religion, age, disability, sex, sexual orientation, marital status, national origin, political opinions or affiliations. For more information on obtaining other extension publications, contact your county Cooperative Extension service.
U.S. Department of Agriculture, Cooperative Extension Service, University of Florida, IFAS, Florida A. & M. University Cooperative Extension Program, and Boards of County Commissioners Cooperating. Larry Arrington, Dean.
Copyright Information
This document is copyrighted by the University of Florida, Institute of Food and Agricultural Sciences (UF/IFAS) for the people of the State of Florida. UF/IFAS retains all rights under all conventions, but permits free reproduction by all agents and offices of the Cooperative Extension Service and the people of the State of Florida. Permission is granted to others to use these materials in part or in full for educational purposes, provided that full credit is given to the UF/IFAS, citing the publication, its source, and date of publication.