Writing a Household Budget
Do you know where your money is going?
These days, it feels like there isn’t enough money to go around. One way to keep track of your finances (and maybe save a little green) is to create a household budget.
1. List your fixed costs.
Fixed costs include mortgage or rent, utilities, insurance, food, car payments and maintenance. These are the things that aren’t going to go away and tend to be the same every month. Think you’ve got everything down? Did you add in the dog food and the kitty litter?
2. Add some savings to your fixed costs.
Set aside a bit of money each month for your savings. Go ahead and call this a fixed cost. You will get used to setting aside a little extra. You may be surprised at how quickly it grows.
3. Determine where you can make cutbacks.
There are a number of ways to lower your driver’s insurance. In most places, it’s cheaper to stay in and make a meal for yourself rather than going out to eat. There’s no shame in clipping coupons. The store brand is just as good as the name brand.
4. Fill out a budget worksheet
There are quite a few different templates available from a simple Google search. Find the format that’s right for you and go to town.
5. If all else fails: Make a budget journal
This is cumbersome and time consuming, but if you just can’t seem to make the numbers work, you probably need to make a budget journal.
With a budget journal, you record every expense you have, whether it’s the movie you went to or the donut you had for breakfast. That caramel macchiato you get every morning might be costing you a hundred dollars a month. Did you calculate that into your fixed costs? You may need to think about a coffee maker…
Writing out a budget isn’t difficult, but it is sometimes unpleasant. Regardless, it is the best way to save money.