Learn How To Budget A Household

Learn How to Budget A Household

learn how to budget a householdYou will need to know how to budget a household if you plan on having a family and staying out of debt. Budgeting is pretty straightforward but it takes discipline to follow your budget, especially when you have access to some form of credit, as many people do. Good budgeting requires that you live within your means and ignore credit unless an emergency arises.  Yes – this means paying cash for everything or having the strength to pay off your credit card balance – in full – each and every month.

Learn How to Budget a Household – Find Out What’s Coming In

To create budget you should first determine how much you make in a month. If you do not receive regular paychecks because you are self-employed, look at your taxes for last year and divide your income by 12. This will at least give you an idea of how much you make in an average month.  When learning how to budget a household, you need to know exactly what’s coming in every month.

The next step in learning how to budget a household is categorizing your monthly expenses. You probably pay utilities, so list all of your utilities underneath that heading. This may include gas, electric, water, internet and phone. Next to the name of each utility, write a rounded-dollar amount that represents the average amount that you pay each month for that bill. If you spend more on gas in the winter or on electricity in the summer, take the total you paid last year for that utility and divide by twelve. Some other categories might include housing, which would include rent or mortgage payments along with house insurance, and debt category for things such as car payments or education loans.


Learn How to Budget a Household – What’s Going Out

Once you are ready to learn how to budget a household by determining every typical expense for a month, add them up. If your monthly earnings are represented by a higher number, don’t get excited yet. You may have forgotten some expenses or miscalculated how much you spend on groceries or entertainment. When you learn how to budget a household you need to learn to include everything in your expenses – from the cup of coffee you buy to the pack of gum for the kids.

When you are ready to learn how to budget a household, if you can get through a few months and still have money left over, you can begin to schedule monthly deposits in a savings account. If your monthly expenses are more than you earn, then you know you need to reduce one or more of your monthly expenses. When you learn how to budget a household you need to be ruthless about cutting unnecessary expenses – especially if you have little or no money left over at the end of the month.

In some cases, if you truly need to find more money – for instance to pay off credit cards or to save for your vacation, you can take some temporary, but drastic steps. First of all, stop eating out – entirely – not even a pizza or a cup of coffee  You will be surprised at how many dollars were leaking away at the drivethru or the coffee bar. This is not to say you have to cook for the rest of your life, but it’s one thing you have total control over.

When you are ready to learn how to budget a household, you can also consider cutting your cell phone service off – you could always get a pay as you go phone – and only use your cell for emergencies.  Perhaps you can cancel your cable service – again this isn’t forever. Instead you can rent movies and TV series from the library – or better yet – read a book or two!

Clean out your house and have a garage sale. We all accumulate stuff over the years that we don’t need or want – and your trash is someone else’s treasure!

Don’t go to the store.  Yup, unless it’s the grocery store, just don’t go.  Stay out of places that sell groceries and other things – so you won’t be tempted to buy bigger ticket items.

Once you have freed up all this extra cash, you can use it to fund your emergency fund and pay off your credit card debt.  Once you have done this, you can use your extra funds to get your cable back or go out to dinner – but you know you can do it with a clear conscience.

Learn how to budget a household and you will have control over your financial life for good.