Household Budget - DOC by Richard_Cataman

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									                     Household Budget

A household Budget is a necessary evil – without a budget you will find
yourself living from one pay day to the next and out of control.

Planning ahead is the answer.

You should be able to identify where your money is going and when. An
overall look at yearly expenses should give you the control, the ability to plan
ahead and ensure that the money that you are earning is being used the way
that you want it to be used.



Creating a household budget takes 3 steps.
       1. Identify how you are spending your money now.

       2. Evaluate your current spending.

       3. Track your spending to make sure it stays within those guidelines.




So now for Step 1 - Identify how you are spending your money now.

Gather together your household bills for the past year. Utilising this historical
data and knowledge of your current income and anticipated household
expenses for the year, insert your income and expenses into either the
‘Household Budget’ from the enclosed CD or the paper copy in the month
when the expense / income occurs.

In order to ensure that you adequately budget for your utility expenses using
last years bills, add on 5% to the total bill to allow for any increases in costs.


Now that you have completed inserting all your income and expenses into
the ‘Household Budget’ it is time for some simple adding up if you are using
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the paper version. Of course if you using the copy from the CD, the adding
up will be done for you automatically!

      Add up each of the columns for your monthly income and expenses.

      Add up each of the rows to show how much you spend in a year on
       each expense category and your income sources.
      Now deduct your total expenses (B) from your total income (A) for
       each month to show if your have a surplus of cash each month after
       expenses or a cash shortage.

Now it is time to take your ‘Household Budget’ one stage further and break
the figures down to a weekly picture. If you are using the Excel Budget, this
will be done for you automatically. If not, please divide your annual totals by
52 for a weekly picture of your finances.

After doing this you are ready for Step 2.



Step 2 - Evaluate your current spending

By completing your Household budget, you can see exactly how much money
you spend each week on each of the expense categories in addition to how
much your household income is on a weekly basis.

This information will enable you to better plan and control the
spending of your money.

       LOOK at where your money has been spent.

       ASK yourself why some areas are high and if they can be reduced.

       SEEK financial assistance if necessary.


If your cash flow is a bit dire each month, take out a piece of paper and draw a
line down the middle. Label one side ‘wants’ and the other side ‘needs’.


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Looking at your monthly household and leisure expenses, allocate which
expenses fall into the category of needs and which are wants.
Now see which of the wants can be cut back on, such as your Pay TV
subscription, weekly hairdresser appointments, buying your lunch every day at
work or having takeaway 4 times a week. (Also refer to out Top ways to save money)




Step 3 - Track your spending to make sure it stays within those
         guidelines.

Re-visit the ‘Household Budget’ at least once a year to reassess your spending
and every few months to check that your current spending is staying on track.



Don’t drive yourself crazy monitoring ever item of spending.
You can become over zealous when tracking your spending to the point that it
can become to stressful and aggravating to family members. Once you
determine which area of spending can be reduced, concentrate on those areas
and worry less about other aspects of your spending.


  Congratulations - the budget that you have put into place will help you
navigate your way through some potential money minefields and should speed
 you on your way to financial growth and independence.      Top ways
                         to save money
 Instead of buying your lunch and a drink each day,
 take a packed lunch from home to work. Based on
 paying $10.00 a day for your lunch for 48 weeks a
 year, taking your lunch to work each day could save
 you $2,400.00 a year!

                    Plan ahead your weekly dinner menu for the family around
                    the sale items in the local supermarket catalogue sales. This
                    will not only ensure that you buy your groceries for the
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                                                                     visit the
                    best prices but it may save you from having toPartner in Finance
                                                                Your
                    supermarket more than once a week. We all know that
  Watch out for cash leakage. If you find yourself
  returning to the ATM more than once a week
  because the money you took out 3 days ago has
  evaporated from your wallet without an apparent
  explanation, you need to examine where your cash is
  going on incidentals.



                     Rather that turning the heater on to full in winter while
                     sitting watching the TV in your T-Shirt, put a jumper on and
                     turn the dial on the heater down to reduce costs.



 Check on plans available for your home telephone and
 mobile costs. Sometimes you can save costs if you have
 the same provider for both. This also applies for
 providers of your gas and electricity – you may get a
 discount if they are provided by the same company.



          Top ways to save money                                 (Continued)


       See where you can cut down on spending on items
       such as the following:-
       Pay TV – cut down to the basic package
       Hairdresser – Find a less expensive hairdresser

                         Deposit more than the minimum on your monthly
                         Credit Card statements into your credit card if
                         possible, otherwise interest charges and fees will just
                         keep adding up and you will never get out of debt.
                         Even consider reducing savings and trimming every
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                         other budget area so you can get your credit card
   Pay off your store cards by the due date otherwise your
   debt will be charged at a much higher interest rate than
   what you pay on your credit cards and you will be
   paying off your plasma TV much longer than you ever
   intended to do. Even if the store card allows you an
   interest free period of say 24 months, work out how
   much you need to pay each month to pay of the
   purchased item by the date that the interest free period
   expires.
                                   Instead of buying takeaway pizza’s or
                                   hamburgers make your own at home. It can
                                   not only save money but also entertain the
                                   kids if they get to make their own individual
                                   pizzas.
    Be wise about how you spend your money. It may be unwise to pay
    too much for goods but it can also be unwise to pay too little. When
   you pay too much you lose a little money. When you pay too little, you
       sometime lose everything, because the thing you bought was
             incapable of doing the things you bought it to do.

  How many times have you found this happen when you haven’t wanted to
  save for a higher priced item which is better and settled for a similar but
  inferior item that was cheaper?




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