How to Set up a Good Household Budget

Unless you have oodles of extra income, your expenses can get the better of you if left unchecked. By not paying attention you can go deep into debt. This can be prevented by setting up a household budget.

Difficulty: Moderately Easy

Instructions

1. Sum up all of your take home income. You can exclude dividends or anything that you are not going to use towards your bills in your household budget.

2. Write down your fixed expenses. This would be your mortgage, car payment, student loans, or anything that must be paid each month and cannot be reduced.

3. Write down your variable and semi-variable expenses. This will be anything that you have control over and can reduce. This would include your utility expenses, monthly food budget and even things such as the cable and internet bills. You can always cancel the cable and the internet if you have to.

4. Write down how much you would like to save each month in your household budget. This will be a guide to how much you have to reduce out of your monthly expenses.

5. Sum up steps 2 through 4 and subtract that number from step 1. What you have left will be your mad money. This is the money you will have left after bills and savings are taken care of.

[stephybc00]

on 8/24/2009 Great article.. easy to follow.Thanks

[oxymora]

on 8/19/2009 Good article. I'm amazed at how many people do not have a budget.