Reader question: Family finance and budgeting
Ok Here's a question, you plan the budget and designate where everything is going, but let's say the family of six in my case has a special event coming up a wedding. There's plane tickets, lodging and nice new clothing for everyone to wear, it could get really expensive. With your budget plan I do not see where this money will be coming from, unless I blow up the budget. There has to be money available for things like that, spending money, where is clothing, gifts, miscelaneous just won't do because there are too many things there already. I'm trying to do my planning, but I need to be realistic. Where do I put the spending money for regular shopping?? I have a big family and I don't want them to feel too limited, I want to build for the future, but also enjoy my money today. I appreciate your information, I'm working with your advice I'm recommending this to everyone. THANKS
You missed one point or I didn't express it correctly...anyway the point is that part of your budget is saving. Every month you put money into savings as part of your monthly budget.
For example, in my case I deposit every month into short term savings and long term savings. Short term is for buying something we would like to have but is not a necessity (i.e. big screen tv, an Ipod, "toys", etc.).
On the other hand long term savings is for that European vacation we want to take but it will take a while to pile up the money to do it, for example. It really doesn't matter how you break up the savings but the point is save, save, save! You never stop saving, so that you have money for events like these. In your case the money for your trip comes from your savings and is paid for in cash not credit.
Planning is also important since if you know of the wedding with anticipation you would save extra in case you don't have the money to cover the whole thing.
When you really think about it, a big reason why people go into debt is due to all sort of unexpected expenses that come along and you don't have the money to cover them...