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Setting up a budget for young families can be one of the most challenging aspects of welcoming a baby. For many of us, figuring how to manage money is a new and daunting step, and you may feel like you have no idea where to begin. It is a difficult step, but also a necessary one that will ultimately help you sleep soundly.

When I became a mother at 18, I had dropped out of school and had no income. My then partner worked, but his income was not outstanding.

We thought we’d never be able to afford living on our own. Until we set up a budget.

Though I know that – if you’re anything like me – the word “budget” might give you the hives, it’s not as bad as you might think it is. In fact, once you just sit down and do it, chances are you’ll be surprised by how easy it is. You might even wonder why you didn’t do this long ago.

Having a budget helps you get clarity on your situation. It helps see where you can cut expenses so that you have more money to spend on things you actually want! And who doesn’t want that, right??

So let’s begin.

First of all, if you don’t have a budget spreadsheet, then I recommend either finding one online, setting one up yourself, or simply dowload mine at the top or bottom of this post!!

And here’s how to begin:

1 – Establish household income

 

The first step in setting up a budget for young families is to establish your household income. If you’re the sole provider, then that will be your salary as well as any other income you are getting (this could be for example child support and alimony).

If you’re living with your partner, then this will include his salary as well.

2 – Establish expense categories

Next comes the expenses. You will have different expense categories based on what type of expense they are. Most people use catergories such as household, transportation, person, entertainments and so on, which is what I use in my spreadsheet.

This is of course highly personal. If these kinds of categories don’t work for you, simply find some that do!

You may prefer to choose categories depending on whether it is monthly or yearly expenses, fixed or flexible expenses, and so on.

Find what works best for you, and set it up in your spreadsheet.

3 – Catalog all the expenses you can think of

This is can be a pain in the butt to do, I know. But if you take a spreadsheet that’s already done, or if you’ve downloaded mine (at the top or bottom of this post), then most of the work should already have been done for you.

You’ll still need to sit down and take some time to consider the different expenses you have that are not included. You may not think of all of them at the time, and this is normal and to be expected. Just add them the your budget as they pop-up or come to mind!

So, if for example, you’ve got “household” categories, then this will be all the expenses related to your household, such as:

  • Rent / mortgage
  • Utilities (water, gas, electricity,…)
  • Cable
  • Insurance
  • Food (you may choose to put this somewhere else, depending on what makes sense to you)

Spend some time putting down all the expenses that you incur during the year into your budget.

4 – Write down the expenses

This might be the most painful part for you. But we’re almost there, so hang on!

Now you need to figure out all the amounts that go into the different cells.

If you’ve downloaded my budget spreadsheet (at the top or bottom of this post), then you’ve noticed that I actually have three columns for each entry ( in the detailed budget). These are the projected monthly expenses, the actual monthly expenses, and the difference between the two entries.

The reason for this is because I noticed that I found it very helpful to be able to compare the two. When you sit down at your computer and make estimates, you then need to be able to compare them to the real the thing. Are you doing better than anticipated? Or are you actually spending more? Which are the expenses where you are over?

And this brings me to my next point:

5 – Setting up goals

Although tracking your expenses is a great start, there’s not much purpose to it unless you actually do something with it! And this is a huge part of setting up a budget for young families; goal setting.

So what are your goals? Perhaps you’re reading this because you want to set up a savings plan (read my post specifically about setting up a savings plan here!), or maybe right now you’re living above your means, and you need to find a way to adjust your spending habits.

No matter what it is, you should have a goal of what you’re going to do with this budget. This will also help motivate you to spend less and save more!

So your goals could be for example to decrease your debt, or to set money aside for emergencies, or you might have a baby on the way and are wondering how you’re going to be able to provide!

Having your budget planned out will help give you clarity, no matter your objective!


 

 

 

 

    You’ve done some really hard work (even just by reading this post to the end!) Here’s a pretty picture to help you relax

 

So, there is the utlimate guide to setting up your budget for young families! If you haven’t already, then download your budget spreadsheet at the bottom of this post!

I hope this post helped you see that not only is establishing a budget very worthwhile, but it is absolutely manageable, even for finance-shy people like me!

What about you? Have you set up a budget? Have you found it helpful? Do you have any other tips you’d be willing to share? Let me know in the comments below!

And in the mean time, take care!

Lots of love,

Jen

Let’s keep in touch! Follow me on your favorite social media sites!

Let's keep in touch! Follow me on your favorite social media sites!


If you liked this article, please consider sharing!