• A family budget is a good financial tool.still life with calculator image by Astroid from Fotolia.com
  
  Starting a family budget from scratch can be an overwhelming experience. Simply getting organized can be quite a chore, but learning where the family's money goes each month can be eye-opening. Taking care of the family's finances and budgeting for the future, while cumbersome, is a great way to ensure that the family's finances will be under control for years to come.
  
  

Track Expenses

• A budget is a forecast of where a family's money will be spent over a set time period. Most budgets forecast a month into the future, with set line items for each normal expenditure. A great way to see if the family's budget is working is to check the actual expenses versus the budget each month. This is also the starting point for many budgets. Review the past several month's worth of checking account statements for the family. Note where each dollar earned is spent and categorize the spending based on like items. For example, place each grocery store trip into a food category and total the category to see how much money is spent monthly at the grocery store.
  
  

Adjust as Needed

• Compare actual expenditures to the budgeted items to see if the budget is in line with reality. Many times, families budget necessary items too high or too low and find that the created budget does not mesh with the reality of their financial situation. Use the initial budget as your guide, however, and adjust as needed to reflect the reality of life. Sometimes, unexpected expenses can blow a budget and force necessary cuts in another area. Adjust and reassess your financial situation as expenses occur.
  
  

Look for Ways to Reduce Expenses

• In the review of a family's budget, there is typically at least one area of over spending, especially if no budget was in place prior to this financial exercise. Looking for ways to reduce spending helps a family save for the future or repay debt faster. Analyze the budget to find areas where expenses can be reduced, even if there is not any obvious overspending. For example, call around to area utility companies to see if switching services reduces the monthly bill. Shop grocery store sales and match coupons to sale prices to drive down food bills. Reduce unnecessary services on cell phone, Internet and cable bills for even more monthly savings.