If your family struggles with making ends meet, these budget busters may be the culprit. Here’s how your family can start living in the black again.

Budget busters are the large potential problem areas that can destroy a budget. Failure to control even one of these problem areas can result in financial disaster. Below we have given suggestions on how to identify potential troublesome areas before they become budget busting problems.

Housing (38 % of your After Tax Income)
Typically this is one of the largest budget problem areas. Many families buy or rent a house they cannot afford. Housing decisions should be based on need and financial ability, not on internal or external pressure.

Food (12 % of your After Tax Income)
Many families buy too much food. Others buy too little. The reduction of a family’s food bill requires quantity and quality planning.

Motoring (purchase and maintenance, 15 % of your After Tax Income)
Often consumers are unwise when it comes both to purchasing and maintaining vehicles. Many families buy cars they cannot afford and trade them in long before their usefulness has expired.

Debts (5 % of your After Tax Income)
Although it would be great if family budgets restricted themselves to only 5 percent debt (credit cards, bank loans including home equity loans, and installment credit), the unfortunate norm for the typical family far exceeds this amount.

Insurance (5 % of your After Tax Income)
Few families understand how much and what kind of insurance is needed. Insurance should be used as a supplementary provision for the family, not for protection or for profit.
Insurance is not designed for saving money or for retirement. So, select insurance based on God’s plan for your life, not on what someone else says you need for your life.

Recreation/Entertainment (5 % of your After Tax Income)
Although recreation is a part of family life, those who are in debt should not use their creditors’ money to entertain themselves or their families. The normal tendency is to escape problems, if only for a short while, even if the problems then become more acute.
Although families need a certain amount of recreation and fun in order to maintain a healthy family atmosphere, they also must resist the urge to indulge excessively and control recreation and entertainment expenses.

Clothing (5 % of your After Tax Income)
Many families in debt sacrifice this area in their budget because of excesses in other areas. And yet, with prudent planning and buying, families can be clothed without great expense.
Medical and dental (5 % of your After Tax Income)
Families need to anticipate these expenses in their budgets and set aside funds regularly to cover the expenses. Do not sacrifice family health due to lack of planning, but at the same time do not use doctors and dentists excessively. Prevention is much cheaper than treatment or correction.

Savings (5 % of your After Tax Income)
It is important that families establish some savings in a budget. Otherwise, the use of credit becomes a lifelong necessity and debt, a way of life. A savings plan will allow for the purchase of items with cash rather than credit, irrespective of the store.

Click here to read “Budget Busters: Part 2”

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