In all budgets there is fat, in a family budget with some many different individuals and many needs there can be a range of requirements that on closer look are not mandatory for the family. To begin to identify what these are, you need to sit down and list them all out. Once you have done this, then the culling of the non-mandatory requirements can begin.
The basis of any budget is identifying how much is coming into the family and how much income is going out as expenses. Unfortunately there are a fair few peaks and troughs on income and expenditure over a period of time, so you may have to look at this from a 6 month or 12 month view to get an overall assessment. It is best to start with a long time period, and then come down to shorter time periods. You would do this say for a quarterly bill. By averaging it out to a monthly or weekly cost, then this would give you an accrual cost over the time period you are budgeting on. Remember that your income is more than the weekly paycheck.
If you have stock or other investments that periodically pay you a dividend, include that in your income for the 6 or 12 months. The maturity of an investment where you receive a large lump sum payment should not be included at this stage, keep it to the side as it could be decided to be used for reinvestment or paying off an existing loan. Once that decision is made, then include that in your budget at the appropriate time.
In the mandatory expenses, these are what you must pay, in other words they are your commitments. This can be a home loan repayment, a personal loan repayment but not necessary the weekly grocery bill. We don’t include this at this point because the weekly grocery bill would have a lot of discretionary items in it. These items are not just the chocolate cookies but also the brand of goods, where there can be cheaper home brands purchased as alternatives.
Standard discretionary items like field trips, entertainment costs, the movies, holidays, cable television are easily identified to make savings from. Look for additional savings if you switched banks that have lower fees and also on whether loan consolidation can you additional savings on fees and repayments that what you current have. It is very important that you are as accurately as possible in drawing up your list, as you need to be making decisions on all of the information, not just on a subset of information.
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