Monday, April 27, 2009

Your Family Budget is Not Just for Rainy Days

A family budget is basically a list of your intended expenses and expected income. The aim is to ensure that your expenses or outgoings are lower than your income.

This quote from Charles Dickens’ David Copperfield says it all:
Annual income twenty pounds, annual expenditure nineteen nineteen six - result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six - result misery.

Unfortunately these basic fundamentals of family budgeting have been largely forgotten over recent times. In the last 15 years we have experienced a period of excess where most of us were spending 110% of our income. Now that the value of our homes has dropped we can no longer use our mortgage as an ATM. And reality has hit – result misery.

It’s time to get back to basics. Bring out the family budget forms, get the family together and work through a plan to reduce spending and find ways to increase income

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