Many families have personal budget, but not all of them are able to set up priorities. If your budget is tight, you can’t buy everything and it’s important to have proper prioritization. We should buy things that are high in the priority list. By having prioritization, we should be able to differentiate between needs and wants. This is an important thing to consider, if we want to have a successful personal budget. We should set priorities that allow us to control our spending, so our expenses will always be lower than our income. It’s important to keep accurate records of things that we spend. One important way to set up priorities is by using categories. At the top of our priority list are physiological needs, such as water, food, personal hygiene and sleep. Next are those related to safety needs, such as family security, protection from crime and employment.
Relationships and love are the next category, which are expenses related to friendship, family recreation and others. Lower in the list are esteem needs, such as sense of contribution, self respect and recognition. They will be followed by self-actualization needs, such as the ability to appreciate life, creativity and expansion of talents. We should be able to implement these categories to our personal budget. We need to make sure that we allot enough money for things that fulfill our physiological and safety requirements. Grocery shopping and water bills are the most important thing. However, despite their significant importance, it is highly advisable to find ways to reduce the amount of expenses. Safety needs are often related to our ability to support the family. It means that we need to own a car or allocate enough budget for public transportation.
When setting up priorities, we should make sure that we are careful. It is important to know some meals may not be needed. Basic nutrition can be acquired from affordable produce. Eating out in expensive restaurants shouldn’t be included in the basic nutrition, category. It should be included in the self-esteem category, because we don’t actually need to eat out in expensive places. With nutritious, affordable produce; we should still be able to create healthy meals. Dining out in expensive restaurants may go beyond the basic nutritional requirements. It may be convenient to frequent fast food restaurants, but it will be quite expensive and we will spend too much money for the so-called basic nutritional needs. Reducing expenses for basic and safety needs may seem a bit harsh, but they may represent a number of unnecessary expenses that we can eliminate.
Relationship-based expenses may include family trip, occasional eating out and other family entertainment expenses that can help us to nurture relationships. It is important that we don’t go overboard when spending money in this category. It is easy to spend so much money for family trips that we end up borrowing cash, by using credit cards and others. We should really consider this fact.