How to create a household budget

Creating a household budget organizes the "layout" of how the money, that is earned by the household members, is being spent and going towards.

Steps

1. Start with the biggest stuff. Are there any monthly or yearly bills that you need to pay? Some examples would be car payments, rent or mortgage, utilities (such as water, electricity, etc), and insurance (medical, dental, etc). Try to round either up or down to the nearest $10 for an average estimate on how much you spend for each item.
2. Begin calculating for every day essentials. How much per week do you spend on gas? What is the usual amount that you spend on groceries, or how many times per week do you go out instead of home cooking? Think of other essential things that you need, not want.
3. Create an area for your earnings. Include all earnings, whether it's tips, "under the table" jobs (money you take home, without taxes being taken out), money you find on the ground, and your salary (or monthly balance if you're paid every other week).
4. Make an area for your "Monthly Income". This is what you take home after taxes are being taken out, if applicable. This is the amount on your paycheck, not your total earnings for the time period.
5. Put your monthly income and your total expenses number side-by-side.
6. • If the amount of your total expenses is greater than your income, then you need to think about cutting back on your spending or think of ways to cut down your bills.
   • If your monthly income is higher than your total expenses, put some away in savings. This money can be used towards a second mortgage, college tuition, or anything else big. Or, you can stash some away for something small like a trip to the spa.
7. Place this budget chart somewhere that the whole family can view and keep track of. If a teen has a job, they can start charting their own money budget. If they go to the movies, they can record it.

Tips

• Paper, calculator, pen
• Computer spreadsheet
• Income notes (paycheck stubs, tax returns, etc)

published 2 years ago

schmeidi

641 points