All the experts agree, every family should have a budget regardless of their income and savings. A budget shows you how much money you have coming into the household and how much of that goes out every month for necessities and entertainment. Most people think of the necessities, but don't consider the money they are spending on fast food, Starbucks and on impulse purchases.



Your necessities generally include housing, food, utilities, insurance, transportation and health care. Once these payments are made, what's left over is your discretionary spending amount for entertainment and other “extras”. These funds are available to you for short-term expenses or long-term investments, like education and your retirement fund.

While the children are growing, you're spending more on necessities and there might not be much left over. It's easy to overlook the fact that just 5% of your income can be a healthy start on an education or retirement fund. Extra income such as a bonus or half the amount of a raise, will make your savings grow quickly. Since they are not in your budget to start, they won't be missed and you'll still have a portion of this extra income to add to your budget.

It's a good idea to consider financial counseling from a professional or at your bank. They are often the best sources for learning how to stretch your dollars into savings and the future benefits they can earn for you.

Once you establish a budget, you have to address impulse purchases. Most people spend small amounts of money on extra items that are not absolutely necessary. You can easily determine where these small amounts are spent by recording every penny spent, everyday for a week. Like most people, you'll be surprised how much the small amounts end up being when accumulated over time.

The most common place for impulse spending is at the grocery store. Establish a family rule never to go to the grocery store when hungry. Shopping when you're hungry usually results in buying items you normally would not purchase. Always go shopping with a list and your saved coupons. Don't give into the need to give yourself a treat or to satisfy a craving. If it's not on your list, don't buy it.

Manage your shopping list by including treats the whole family can enjoy. This includes food treats and also entertainment like going to the movies, out to dinner or even renting a movie. Once you know you have included these items into your weekly shopping list and budget, you will be less likely to make an impulse purchase.

The best rule to follow when you're tempted with an impulse purchase is to ask yourself if you really need it. Don't rationalize the purchase; if you can't immediately answer “yes”, then most probably you don't need it and should keep on walking.

Here's a list of the easiest ways to save money when creating your budget:

- Off-brand products – You can use coupons, but you actually save more by purchasing off-brand. Most people don't realize that off-brand products are usually a name brand that is being sold with the store label. Most taste the same, except perhaps specific taste products like mayonnaise.

- Make your lunch – This can be a huge savings just for one person. If you normally spend $6.00 at lunch, at the end of the week, you've spent $30.00. By taking your lunch to work, you potentially save $127 a month that could go to savings or other expenses.

- Drink water – Soft drinks and other designer drinks really aren't good for you. You'd save a lot and make your body happy by drinking water.

- Plan meals – Before going grocery shopping, plan your meals for the week and make a list. Be sure to include your treats and do not deviate from your list while shopping.

- Satellite and cable – The least expensive package can run from $40 - $45 per month. Your annual bill would be up to $540. Eliminate this one expense and you could be saving that amount every year.

- Video rentals – Limit your rentals to one or two every other week. If you find other movies you must have, write it on your movie list and rent it the next time out. Renting too many movies at one time is a money waster.

- Return rentals early – Movie rental fees add up quickly. Make a note of the due date of the movies you rent and ensure you return them early or on time.