Three Basic Steps to Stick to a Family Budget

With a large mortgage, utility bills, insurance, and two car loans to pay off, sleep goes right out the window with the addition of baby twins. But there are secrets to managing our growing family's budget which we've discovered as we trudge through the unknown world of parenthood, and new money matters.

First and foremost, it is critical to note that of all the expenses noted above, nowhere do I list credit card debt. Credit card debt is perhaps the easiest and most disturbing debt to rack up. You can go from smiles to tears literally overnight, never mind the buyer's remorse. So first things first, identify then tackle your credit card debt until it is no more. My family does actually accrue this type of debt on a monthly basis, but only to pay bills, or buy groceries, gasoline, etc. We use our credit cards to accrue points on various rewards programs, and also just to keep our accounts current. At the end of the month, we always have enough income to simply pay off our monthly expenses.

We track most expenses in a simple Microsoft Excel spreadsheet. You can find several templates on the web, and depending on the version of Excel you can also pick from a standard selection of budget standards. This is a great tool, especially when comparing month-to-month expenses vs annual expenses.

For example: Even tho we are still adjusting to a life and budget that includes twin babies, we can see that our most expensive category in our budget continues to be "eating out." It certainly doesn't feel like we eat out very much at all. But, this is what having a written budget that tracks costs allows you to do. So I know that I have to adjust my spending on "eating out" in order to meet our budget goals.

Having a goal to work toward is a good motivator to save up as well. We chose, as a basic goal, to save up for eight months' worth of living expenses. Sounds like a lot of money, but it works great to drive down our desire to spend on eating out too often.

So, pay your credit cards in full every month, track your costs, and set a savings goal for your family. That's what we've done and it's worked out great.