This year Oprah Winfrey has been challenging Americans to get out of debt and take control of their spending. She calls this America’s Debt Diet. Phase Two of the debt diet starts with planning a monthly family budget
To begin a monthly budget for your family, write down all of your monthly expenses, estimating as best as possible. Here are a few things to keep in mind when looking ahead to your expenses:
* Take a look at your calendar and note upcoming events that might cost money.
* Make sure to account for unexpected or emergency expenses. Perhaps you could add ten percent of your total expenses to your total budget. Allot that money for an emergency fund for the month.
* Of course, make sure to put some money aside towards savings.
* When the month is over, any money that you haven’t spent should go towards debt or savings.
On Oprah’s website there is an estimated budget calculator to give you a better idea about where to begin planning your own monthly budget. The suggested breakdown of a typical monthly budget is as follows:
Housing 35%
This amount includes more than merely rent or mortgage. Instead, you should include everything it takes to live in your home such as insurance, taxes, home maintenance, and utilities.
Debt 15%
Include student loans, credit card debt, or any other type of debt.
Transportation 15%
Include car payments, automobile insurance, gas, or anything other transportation costs.
Savings 10%
Savings can be divided amongst retirement savings like a 401(k), emergency savings, college funds, etc.
Expenses 25%
This category is for other expenses such as groceries, childcare, entertainment, charitable donations, or other expenses that don?t fit into another category.
The Debt Diet experts say that next you should determine how to pay your bills. If you get paid more than once a month, determine which bills you will pay with each paycheck. Other expense like groceries or clothing can be split up between paychecks.
As you use your spending plan you will be able to fine-tune it to better meet your needs. To go through the Debt Diet steps in more detail, go to Oprah’s website.