How to Prepare a Home Budget Plan

A home budget is an important tool in managing your household finances.

Managing money is critical to maintaining a good credit score and avoiding debt problems. Juggling household financial obligations can be confusing and frustrating. The best way to get your home finances under control and make sure that you pay all of your bills on time is to learn how to prepare a home budget plan so that you can schedule bill payments, see how much money you have coming in and going out, and save money.

Things You'll Need

• Computer with spreadsheet software

Instructions

1. Create an expense-tracking spreadsheet using a computer program such as Microsoft Excel. Keep track of all your spending that does not involve paying bills. This includes eating out, entertainment, food and gas. Keep track of this diligently for one month.

2. Save all billing statements for one month.

3. Break down your spending into categories you can include in a budget spreadsheet. For example, you can group gas and food under "House Expenses" and you can put movie tickets and restaurant meals under "Entertainment". The goal is to create budgets for each of these categories so that you will know how much you have left to spend during the month.

4. Build a computer spreadsheet that will allow you to list all of your bills and expenses on one sheet. Include column headings such as; description, due date, amount due and paid. Create a section that allows you to input your monthly income.

5. Enter all of your bills in your spreadsheet and fill in all of the information. Total your expenses to find your total monthly obligation.

6. Input your monthly revenue in the area you have designated for that information. Create a formula that subtracts monthly bills from your income. If this number ever becomes negative, you need to analyze your bills and make spending changes.

Tips & Warnings

• If you are not familiar enough with a computer spreadsheet program to make a budget spreadsheet then you have three options; have someone create one for you and show you how to use it, purchase a home budgeting program, or create your budget with paper and a pencil. You can create templates and photocopy them to avoid having to write everything out each month.

References

• MSN Money: How to Build Your First Budget
• Money-Zine: Family Budget Basics
• The Digerati Life: How to Make a Budget in 10 Easy Steps

Resources

• Kiplinger: Family Budgeting Worksheet