How to Plan a House Budget
For many families, planning a house budget constitutes the key to financial freedom. It can allow you to get out of debt or increase your savings. Budgeting your money requires diligence. You need to correctly estimate the amount of money that you spend on certain items to avoid coming up short. With careful tracking, you can create a budget that works for your family, though it may take some time to get it right.
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Instructions
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Save your receipts for one month. You need to track at least one month of spending to really see where your money goes.
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Divide your spending into categories. For example, you can group all of your grocery receipts as "food" and movie receipts as "entertainment." Common categories include food, clothing, utilities, health, mortgage or rent, gas and insurance. However, your family is unique--you may not use all of these categories or you may have additional ones.
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Add your totals for each category. This will show you how much you spent in each category for one month.
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List other non-monthly payments you must make. For example, you may not have to pay your car insurance or water bill every month, but you'll have to factor it into your budget.
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Add up your income. Check it against the money you paid within the month. Hopefully, you make more money that you spend. If not, you need to rein in your spending.
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Estimate how much you will spend in each category based on your spending habits. For example, if your grocery receipts averaged $100 per week, then you would budget $400 to $450 for the month.
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Reduce expenses as necessary. If you need to reduce your expenses to meet your financial goals, look at areas where you eliminate or reduce spending. For example, you may be able to cut back on eating out or entertainment costs.
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Tips & Warnings
When tracking your expenses for the month, divide and add your receipts on a daily or weekly basis. Doing it all at once can seem overwhelming.
Use cash to make sure that you're spending within your budget. Take out all of the money that you budget for groceries, for example, and use that money while shopping. This can help you avoid impulse purchases, which can quickly add up.
References
- Photo Credit Calculating the receipts image by painless from Fotolia.com
