With the credit crunch taking effect, more than eight out of ten parents are now making cut backs. 'Organised Mum' believes that what is needed is some good old fashioned budgeting to get families through the tough economic recession, and in the process learn lifelong skills that will help finances go further.

Sarah Sadler, founder of Organised Mum, comments, 'Many families that relied on a 'buy now, pay later' means of living are now finding that the lack of credit available is becoming a struggle. What is more, parents are also are finding that their weekly shopping bills are going up, along with energy bills and that jobs are also at risk. The best way to keep finances in check is to make detailed weekly or monthly budgets to find out where savings can be made. Most importantly, these must be updated regularly if they are to be effective, so being organised is a must.'

Top Tips for worried families on budgeting for the year ahead:

Budgeting your finances

If you don't already have a plan in place for how you're going to spend your money each month, now is the time to create one. Use an excel spreadsheet to plug in your monthly income and expenses and play around with which items you can reduce. In addition, remember that living on a budget is intended to help you free up your money so that you can spend it where you really want to, rather than unintentionally spending more than you can afford each month.

Plan your finances on a month by month basis. Note any social events that you or the children may have in that month, set an estimated budget for each one and write it on your calendar so that you can see exactly what you are spending.

Budgeting is all about planning in advance so ensure you keep a note of all your weekly and monthly outgoings and live well within your means by trying to keep a small amount of money each month for unexpected costs: such as a car problem, forgotten birthday, household items that needs replacing etc.

Food Bills

Plan meals ahead. When making the list ensure that you have considered the week's activities, for example, one of your children may be out at a sleepover and won't require dinner that night. You can then use the meal plan to make a shopping list that ensures you only buy the food you will need for meals that week.

Set a weekly amount of money for food and stick to it. If necessary - shop around for the best deals on brand items and change supermarkets if necessary. Moneysupermarket.com compares the cost of thousands of everyday items at big named supermarkets.

Try growing your own vegetables. This is not only a way to save money but it's a great activity to do with the children. Obviously what you can grow will depend upon the space you have available but even if you are short on space, you could grow herbs or a tomato plant in a planter or pots.

Entertainment

Use your local library for a great afternoon activity and some free entertainment for you and your children. As well as books, story book tapes and DVDs, the library also provides free Internet access. It is also important to encourage your children to read as an alternative to watching television.

Try rotating your children's toys instead of regularly buying new ones. As we all know, children tend to get bored easily, but succumbing to buying a new toy whenever your child demands one can become extremely costly. Box things up that they haven't looked at for a while, then in a few weeks' time pack away more and get out the ones you've hidden. Children will love seeing the toys again and will appreciate them as if you had just spent a fortune on a box full of new ones!

Saving money / ways to earn more money

Most families spend quite a bit of money on non-essential - yet standard - items. For example, consider eliminating your cable or satellite TV service - or at least switching to a lower-cost option for a while. In addition, consider the money you may be spending on the convenience of a mobile phone or text messaging. These are luxuries that can be eliminated when you are short on cash.

Buy birthday cards / presents in advance. You can avoid overspending by thinking in advance about what they would really like or need, and shop around for the best deal. You are also prone to spend more on something when you know you have a limited time.

Alternatively set up your own savings scheme where you put money away each month to help save for next Christmas.

Getting the children involved

Manage your children's expectations by explaining that you may not have as much as you used to and that some things will have to wait, like a new outfit or a family day out.

Give children a small amount of money to be responsible for to help them learn about budgeting. Reward them if they are able to save money.

January 2009

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