How to Be Successful With Household Budgeting
For successful household budgeting, you must create a platform on which to figure monthly income and expenditures. The income portion may include all permanent jobs but not income that fluctuates throughout the year. Expenses come in different forms, such as mandatory and nonmandatory, and you need to differentiate between the two for successful financial planning. Once you see your assets and debts, you can figure how to manage your monthly household budget.
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Instructions
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Start your budget on a columned piece of paper or on the computer. You need columns to separate your income from your debt. Print income at the top of one column and expenses or debt at the top of the second. At the top of the third column, print nonmandatory expenses, and at the top of the fourth column list savings.
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List your monthly income in the income section. Use your net income or your take-home pay. Do not add extra income such as overtime and side jobs unless the second jobs are permanent and not occasional work. Do not add stock dividends because these fluctuate throughout the year.
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List your mandatory monthly expenses, such as rent or mortgage payments, health insurance and utility payments, in the debt column. Estimate your grocery, gasoline, transportation and parking costs by looking at the prior month's receipts. Figure your yearly home, life and auto insurance costs, and break them into 12-month units to figure your monthly insurance costs.
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Estimate nonmandatory expenses, such as recreation, costs of eating out, going to the movies, shopping and salons for haircuts or manicures. Examine your prior month's receipts to add your monthly discretionary spending.
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Figure into the fourth column the amount of money set aside each month in savings. This could include money for college tuition, a vacation fund or retirement. Although this money is put into savings, it will not count against your expenses.
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Add and total each column separately. The income column should add up to more than the debt and nonmandatory expenses column. If the debt and expense columns have a larger total, you must determine what you can cut do to cut back on spending or lower your contributions to savings to balance it out.
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Tips & Warnings
Maintain a monthly budget to keep track of your money and how it is spent. Once you discover how you spend each month, you could discover ways of trimming expenses and saving or paying off high-interest loans and credit cards.
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