The Family Budget

In my last two posts, I included some Tips on Preparing the Family Budget.

I hope I was able to impart the message that budgeting is not just a matter
of zeroes and ones.

Here you will find a Family Budget Sample. It is meant to serve as a mere
guide. I am not a guru nor do I have a PhD in business. As I have mentioned,
there are many systems out there. I cannot emphasize enough the need for
you to research and research until you find a system that works for you.
Always, always, always, use your better judgment when making financial
decisions.

The Zero-based Budget

One system used for budgeting is known as the “Zero-based Budget”.
It uses the basic principle that: income – expenses = zero.

“Income” refers to all money coming in.
“Expenses” refers to all money going out.

No, it does not mean that you will spend it all.

What it does mean is that every peso, dollar, euro, yen, etc that comes
in is allocated and accounted for.

Income (Php net)
Salary - 15,000
Bonus
Gift from abroad (in Php)
Total - 15,000

Expenses (Php, net)
Tithe - 1,500
Savings - 1,500
Savings – Retirement Plan - 1,500
Amortization – House - 2,000
Utilities - 1,000
Food - 2,500
Transportation - 2,500
Sports and Vitamins - 1,000
Clothing - 1,000
Emergency Fund - 500
Total - 15,000

Although this is a monthly budget, H and I have a spreadsheet for the
entire year. It has a monthly budget vs monthly actual set-up. I prefer
to update the file weekly. We TRY to discuss the status every 15th and
31st of the month. Again, we too are a work in progress.

Tips on Preparing the Family Budget continuation

As I mentioned in my previous post, H and I are helping out with the
Singles Engagement Retreat. In the last retreat, we got a request for
tips on budgeting.

This is the continuation of List #2 - Tips on Preparing the Family Budget

6. Decide to tithe. Tithing means allotting the first 10% of your earnings
to your church and/or religious community. It serves as a reminder that
the family’s wealth is first and foremost a gift. Everything is just “icing on
the cake”.
7. Decide to set aside 20% or more of your earnings for savings
and investments. Yes, you have a right to enjoy the fruits of your hard
work. However, you must remember that additions to the family, the
education of children, sickness, retirement and emergencies are all facts
of life. It would be wise for your family to prepare for all these. Banks,
insurance companies, mutual fund companies, the stock market,
entrepreneurship, franchising, etc are some of the ways you can maximize
your savings. How much do you expect to earn? How soon can you expect
your earnings? What are the risks involved? How long will your money be
“tied” to the investment? What are your options if you need the money
sooner? Are you comfortable with the terms and conditions? Etc etc etc.
Again, do your research. A friendly warning, if it seems too good to be true,
it usually is.
8. Eliminate bad debts. Credit cards are okay but be sure to pay for
the entire bill on or before the due date. The interest can put you in a
serious debt hole. If you must borrow, do so because it is for an investment,
you are happy with the potential returns and more importantly, you’re sure
you can pay for the loan if things don’t work out. Avoid borrowing for a
“splurge item.” Save up for it. Or better yet, allocate earnings from an
investment. In this way, you can be sure that the “splurge item” is something
you can afford.
9. Avoid lending money to others. It has been said that when you lend
money to a friend, you risk losing both your money and your friend. If you
must lend, consider the possibility that you will never get your money back.
Instead of lending money, others have chosen to donate instead. This is with
the consideration that there is an emergency and you have money to spare.
What to do with people who’ve developed an unnecessary financial dependency
on you? “Tough love” is needed when a person is capable of earning but has
just chosen not to do so. You are doing yourself, your family and the other
person a favor by encouraging them to be financially independent.
10. Last but not the least, trust each other and make all financial
decisions together. No secret bank accounts please. It says a lot when you
cannot trust your spouse with your money. Bear in mind that more important
decisions might need to be made in the future. If you are not yet at that level,
now would be a good time to start working things out.

There are no guarantees in life. The probability of success is simply greater
when God, the husband and the wife work together.

I'm putting the sample budget in my next post. See you there!

Tips on Preparing the Family Budget

We are currently preparing for the SFC Singles Engagement Retreat.
This is actually an enjoyable service for H and I. It's a chance to give
back to others, the gift which we had once received.

Most couples will prepare for the perfect wedding day. Sadly, some
are ill-prepared for the marriage that happens after. The Singles
Engagement Retreat is an opportunuty for engaged couples to get
to know each other better. It is a chance to discuss likes, dislikes and
non-negotiables. The retreat's main goal is to better prepare couples
for the challenges and joys of married life.

We got a request from a participant of the last Singles Engagement
Retreat; could we provide tips on budgeting? Hmm, this is a tricky
subject. There are no hard and fast rules. Different couples use
different systems. Also, you may be using a system now but you
may decide to just replace it in the future. H and I can attest to this.

H and I are still a work in progress. In the meantime, this is what
we're working on...

Let me start off with List #2 - Tips on Preparing the Family Budget

Here are some things to consider when preparing the family budget:
1. Have an abundance mentality. Focus on your blessings.
Trust that God has already provided for all your needs.
2. Pray for guidance and the right mindset. Some couples
consider budgeting as a burdensome task. Instead, think of it as
a tool in managing your family’s finances. A positive outlook will
make budgeting a more enjoyable task.
3. Research on the different systems that are out there.
Read books. Attend seminars. Check the internet. Ask tips from
trusted family and friends. Will you use a software or will you use
old fashioned pen and paper? Try and try until you find a system
that works for you.
4. Decide on who will manage the family finances. This
includes making the budget, tracking the expenses, paying the
bills, filing the receipts, and ensuring that matters, related to the
family’s finances, are in order.
5. Include in your schedules time to discuss the family’s
budget and financial goals. Anything important is worth
setting aside time for. Don’t just compute. Use the time to discuss
your reality, your fears, your hopes and your aspirations. Goals
may vary according to the family’s needs, lifestyle, stage in life,
etc. Remember that it is okay to dream for your family. Whatever
the outcome, agree to head towards the same direction.

Hmm, that may already be a lot to chew on. I'll continue this in
my next post.


I love lists... There have been so many that I can't
recall them all...

This is my ode to the humble list...