How to Create a Home Budget

This article will help you create a simple and easy to follow budget for you home finances and budget planning. You do not have to be a financial genius to do personal budget planning. Once you have a budget laid out, you can use your budget to help you achieve some future goals. I have been using this system for years and has eliminated the surprise of a large heating bill, and the panic of 'how can I pay to register my car this year?' Let's get started!

Things You'll Need

• Itemized list of your monthly expenses.
• Spreadsheet program (I use Excel, there are many others)
• List of annual expenses
• Checking and savings account
• Drive to succeed

Instructions

1. Start by creating a new spreadsheet in your spreadsheet program. Name it something simple like HouseBudget and for ease in finding the file, save it to your desktop. This will be your budget planning worksheet. If you have several computers in the house, consider sharing the file so others can view it. Your budget should not be for your eyes only ~ this is for family budget planning or personal budget planning.

2. Name your first sheet 'Main.' This will be your master page where all of your monthly expenses are listed. Add each expense by name in the first column, and the cost in the second column. Add an expense for 'Annual.' You will be using this for annual expenses.

3. Create a second sheet called 'Annual.' List all of your annual expenses in the first column. Some ideas are car registration/inspection, heat expense (oil or wood delivery), Christmas, birthdays/anniversaries.. anything you pay out each year, but not every month. Use the second column for the amount needed annually. Use the third column to calculate the monthly amount needed. Total this column and use the total in the 'Annual' line on the 'Main' sheet. Using the annual savings method outlined here allows you to smooth out your annual expenses. Businesses use this method too! You will account for this expense each month by moving the funds into a savings account. When the expense comes due, like Christmas shopping, transfer the money from your savings account to your checking account!

4. Create a third sheet called 'income.' Itemize your monthly income here. You can compare your monthly income now to your expenses. This is a powerful tool for fixing your finances. In a basic sense, you are looking at your cash flow. Are you spending too much in one area? Do you have extra money to save away or are you running a deficit?

5. Watch your budget! Keep within your range allowed in your budget. You can track your spending in a large number of ways - use whatever method works best. Adjust your budget when expenses or income changes. Congratulations! You've just created a househould budget planning worksheet for budget planning!

Tips & Warnings

• Use your budget to help save for a trip, or a new TV! Just add a line to your annual savings sheet, and put a little away each month.

• Now is a great time to search for a savings account that pays a higher interest rate. That $100 a month you're saving for Christmas is now sitting in a savings account earning interest. Earn as much interest as you can!

• Do not underestimate your expenses or overestimate your income. If you really do spend $100/month on coffee, account for it. Your budget will not be a useful tool if the information you add to it is inaccurate.