How to Make a Household Budget for Moms

Track your recent spending to help formulate a household budget.

The best way to hold of your finances, start a savings account and ensure that you will get out of debt is to create a household budget. No matter what your financial prowess, learning to create a household budget is one of the best things a mom can do.

Things You'll Need

• Copies of bills
• Pay stubs
• Bank statements
• Receipts
• Pencil
• Paper
• Spreadsheet or financial program

Instructions

Find Out What You Spend

1. Get out your bank statements from the last three months.

2. Create categories for income, rent/mortgage, insurance, automotive, dining out, groceries, utilities, cable TV, household items, entertainment and other areas in which you regularly spend.

3. Sort your income and expenses by category.

4. Add up the totals for each category to give you a good idea of where you currently stand.

5. Distinguish between fixed--unchanging--expenses, such as your rent or mortgage, and mutable-- changing--expenses, such as groceries or entertainment costs.

Put Together Your Budget

1. Add up all income sources for one month. This will be the money you have to work with.

2. Account for and subtract all fixed-expenses. Don't forget your cable bill, car payments, and credit-card bill minimums.

3. Ensure that a portion of your monthly income (at least 5 to 10 percent) is going to a savings account and that you've taken any allowances for the children into consideration.

4. Look at your remaining expenses. Are there areas where you are overspending? Make cuts as necessary.

5. Your budget should equal your income. If there is money left over, put it in savings. Make sure that every month, you account for how every dollar will be spent.

Tips & Warnings

• Using a software program such as Quicken will help you to automate your budgeting process.

• If you're unsure how much to budget for a category, say clothing, create an amount that's higher than what you think you might need. If you don't spend that amount, then you can either make an extra payment on a credit card, place the money in your savings account, or roll that amount over to next month.

• Double check that all expenses have been accounted for. If you create a tight budget but forget about your student loan payment, you could be in a financial mess.

References

• The Simple Dollar
• Money Saving Mom
• The Budget Kit