Create a budget and adhere to it

Creating a budget is a central element in managing your family’s finances.

	Identify where all your family’s income is coming from, including work and other sources such as investment income. You should also track when your income comes in (e.g. date of month) as well as what form you receive it in (e.g. automatic deposits versus cheques).
	Use your spending diary to match your total monthly spending against your total monthly income. Monitor your spending diary and budget for two months to determine how closely your real life experience matches up to it.
	Create various expense categories that mirror your spending diary and include the monthly amounts you allocate toward short and long-term goals. If necessary, fine-tune your budget categories and reallocate your income to meet your needs.
	Remember to budget for unexpected expenditures such as car trouble, replacing a broken hot water heater or paying for a school trip.

Save, save, save!

A penny saved is a penny earned. Simple, right? Actually, there’s much more to it than that.

	Take a percentage of your income (5– 10 per cent) and put it away in your savings account or another investment vehicle. Your goal should be not to miss any monthly savings payment.
	If one of your spending priorities is a particular big ticket item, such as a new stereo or appliance, save extra money towards that on top of your monthly savings, but remember to curb spending on big-ticket items that aren’t a priority right now.
	Talk to your bank about setting up automatic withdrawal payments so a portion of each pay cheque goes directly into your savings account, forcing you to automatically save money before you have a chance to spend it. This concept of paying yourself first ensures that your essential financial savings come before discretionary spending.
	Try curbing small expenditures such as expensive coffee or manicures and watch your savings add up.