How to Chart a Household Budget

Keeping a budget chart to manage money is vital in tight economic times. Learn what to chart on your budget and how to organize your household income and expenses to avoid pitfalls.

Difficulty: Moderately Easy

Instructions

Things You'll Need:

• Computer
• Money management software or spreadsheet software
• Information on income and expenses
• printer
• paper

1. The first step in managing your household budget is to understand what you are spending and at what time intervals. Set up your budget chart to reflect your income and payment schedules.

2. Make a category at the top left column of your chart called Net Household Income to reflect money earned on a regular basis. Chart both income amounts separately for a dual income household. Leave a space for miscellaneous to include any other income obtained.

3. Next break your budget chart into categories reflecting different types of expenses starting with ones that must be paid on schedule. Examples of these budget categories include household, auto, insurance, investments, utility bills, etc.

4. Toward the bottom of the budget chart make categories that reflect expenses that are needed but can be managed in varying amounts. Examples of these household categories include: Food, entertainment, clothes, supplies, allowances, etc.

5. Include a budget category at the bottom of your chart called Miscellaneous Household Expenses. This category will reflect emergencies not in your budget and allow a place to save.

6. Put two columns side by side at the top left of your Household Budget Chart labeled "Budget Goal" and "Budget Actual". Budget Goals are estimates of what amount of money you will need to spend in that category depending on your household schedule. Budget Actual reflects the amount of money you actually spent.

7. Lastly, make a category at the bottom left of your budget chart called Gross Income or Income Available. This category reflects the amount of money you have left after subtracting all expenses in your Budget Actual column from the amount you started with in your Net Income Category at the top.

Tips & Warnings

• Round your household income totals down and your expenses amounts up.
• Chart your budget goals a little higher than you initially estimate.
• Fill in all your required household budget amounts or necessities first, then work down to amounts for extracurricular activities and emergencies at the bottom.

Resources

• Household Budget Resources
• Printable Budget Sheets

[RENorton]

on 4/1/2009 Great article. Very well-written with some great tips for charting a household budget. Excellent work! Thanks!

[maryellen1001]

on 3/23/2009 Great step by step instructions!

[sonni57]

on 3/22/2009 Good instructions on how to chart a household budget. We have to watch money closer these days.