What Are Household Budget Expenses?

Compiling a household budget requires the allocation for all possible uses (expenses) of money on a monthly basis. It is important to realize that this includes paying "yourself" (savings/investments) in addition to others (bills).

Savings

Paying yourself first is the most important step to ensure money will be available in the future for things such as retirement and a child's college education. Examples of these accounts include savings/investments/401k, college and emergency.

Fixed

Expenses that will unlikely vary from month to month remain fixed. Examples include mortgage/rent payments, loan payments, property taxes and insurance premiums.

Variable

Variable expenses differ according to usage, but are necessary for daily living. Examples include utilities, transportation (gas/bus fare) and clothing.

Variable Discretionary

Not necessary for daily living, variable discretionary expenses are still desirable to enhance quality of life. Examples include dining out, entertainment/recreation and personal care (haircuts/manicures).

Balance

A successful household budget will balance so that the income equals expenses. An income surplus indicates that more money can be spent on expenses and an income deficit indicates that expense cutbacks are necessary.

References

• Money-zine.com Household Budget Basics

Resources

• Household Budget Worksheet
• Family Budget Calculator