How to Create a Household Budget Every household needs
Shared by: loe13858
How to Create a Household Budget Every household needs a budget. While everyone agrees on this principle not everyone can budget wisely. There isn't any one rule to follow to create the perfect budget but here are several practical tips to starting your own household budget: #1. Set your goals- Setting a goal for yourself would motivate you to spend within your limit. Without goals you would not be motivated to set a budget for yourself. Start by setting practical and achievable goals. Your goals can be in the long term, like a trip to Europe for a vacation or short term like buying clothes next week. Just make sure that these goals are personal. #2. Plug those leaks. If you find yourself inexplicably short on cash and your mind is mysteriously a blank as to where you spent that money then you better keep better records. For a week keep a close watch on your spending. If you regularly go to your friendly Starbucks maybe you should think about getting just regular coffee. It may not seem like much now but the few dollars you'll save a week will seem like the smartest thing you've done after a year. Just keep a close eye on your spending and you can see where your money is going, it's either that or you have a double that spends your money for you. #3. Ask the rest of the household to pitch in. If you're used to just doing the budget by yourself then maybe you should rethink the involvement of the rest of your family. You may enjoy being the sole arbiter of your household's budget but not asking your spouse or children to be a part of the decision making process runs the risk of them ruining the budget. Explain to them the importance of following the budget strictly and that they will have to make sacrifices. Make the budget a family matter and you can avoid any one member making unnecessary expenses. #4. Beware of the wolf in sheep's clothing. Some of your expenditure maybe for items that are masquerading as necessities. If your income doesn't cover the basic needs of your household like food and electricity, see if you can find some expenses that should be cut. You may think you vitally need that new pair of jeans but not finding an empty pantry is more of a priority. #5. Pay yourself. Not all budgets have to be restrictive. Set aside some money for family outings or dinners out. Your budget should help you plan for the future but any budget that doesn't leave you some for fun activities is designed to fail or drive you crazy. #6. Don't spend more than you earn. Every child knows that having one apple doesn't mean that you can eat two. Unfortunately most people forget this very basic tenet when it comes to budgeting. Spending more than you earn is dangerous. You may not be in the poorhouse yet but you're definitely headed there. #7. Avoid high-interest debt. Check what credit cards offer the lowest rates of interest. Many people spend way too much on credit cards and they spend half their income just paying the interest. Before you start paying any outstanding debts, focus on the paying off your credit card bills. This could save you a lot of money in the long run especially if you have a card with very high interest rates. #8. Plan for the future. Your budget is really for the unexpected surprises that life will throw your way. A new baby, unemployment, accidents could all happen to you at the least expected moment. Instead of being caught unawares, you should plan for these events. #9. Don't count on surprise benefits. If you are just waiting for your rich, old uncle to die and leave you an inheritance, don't. Making a budget on the assumption of future cash will leave you open to unwanted debts. Tax returns, year-end bonuses, finding a buried treasure aren't things you can promise the bank. #10. Make a habit of saving. Making a habit of saving is hard to make but it isn't impossible. If you've been a spendthrift all your life, there is still time to change. Your family's welfare relies on a good budgeting skills. Getting More Than Your Money's Worth- Tips for Your Household Budget If you know where every penny of your money goes and has plenty of spare cash lying around then you're too rich or too smart. For the rest of us struggling through budgets and stretching the paycheck to pay off the vast amount of bills, a way to save more money is important. Making that dollar go a long way isn't a hard thing to do. Here are some practical tips for the penny pinching household. ● Add up all your necessities. By this we mean your very basic needs like water, electricity, food and housing. There should be some money left over for the rest of your monthly expenditures. Listing all your basic needs will help you figure out how much you spend for other items ● If your budget is short, now is the time to look for items to cut back on without affecting your basic needs. There are always ways to cut corners when it comes to your household budget. A lot of people spend more than they should and they spend it on their miscellaneous expenses. ● Make a grocery list and stick with it. We usually spend too much when we go grocery shopping. Buy in bulk to benefit from the bulk discount. It is generally cheaper to go to the store on Monday because prices are lower. Check the store with the lowest prices and shop there. Go for the bargain carts. And there are always coupons to collect to get the best discounts possible. ● Bring your lunch to work instead of eating out. Save money by not eating out every week but only for special occasions. ● Use cash as much as possible. Avoid using your credit cards, unless using plastic will give you a better deal. ● Pay off your credit card debts as soon as possible. You can avoid the high interest rates as well as generate some extra income. ● Avoid impulse shopping. If you find something you think you need, go home and think about it. Consult your budget and soon that urge to buy that item will pass. More often than not looking at the amount of bills you still need to pay will deter any impulse buying. ● Fore go the big name brands when you're buying clothes. Yes, they may look smashing on you but you could get knock offs at any bargain store. You could even try shopping at garage sales or the Salvation Army. You would be amazed at the clothes that are available. Because many wealthy people give their clothes away at this thrift stores, you'll find designer clothes, evening gowns and leather jackets. ● Rent a movie instead of going out for a movie. You'll save on popcorn and soda costs. Or if you are going out for a movie bring your own snacks. The cost of sodas and snacks are 25% higher in movie houses. Plus, homemade popcorn is healthier. You can choose the low fat variety. ● Cancel the cable, newspapers and magazine subscriptions. This may cause a blood curdling howl among the kids but try to explain the importance of cutting back on the budget. The whole family could probably live without HBO or Cinemax. ● Clean out the attic and have a garage sale. You never know what treasures you may have hidden in those moldy old closets. Try selling your old toys at specialty stores. Saving money is a creative act in itself. There are many ways to cut corners when it comes to saving money and all you have to do is have the self-discipline to follow through on them. It may take a while for your finances to straighten out but until then a general belt tightening is in order. Avoiding the Money Black Hole- 5 Expenses that suck your budget Have you been saving money incessantly and still find yourself a bit short? Aside from the usual spending on clothes and food there are other necessities that you can cut back on. This may seem the height of cheapness but finding ways to cut back on your basic needs will go a long to way to stretch your limited budget. Here are some ways to cut back on spending on your basic needs. House. This is probably your largest money black hole. Whether you're renting or your paying the mortgage, the roof over your head sucks a large percentage of your income. Have you ever considered alternative ways of living? Living in a trailer park doesn't necessarily make you trailer trash. You can spruce your trailer with the money you will be saving from the rent on a suburban home. Boat homes are also another alternative. For the more adventurous, why not try squatting in someone else's home. You don't have to call it squatting but house sitting to assuage your pride. Some rich people don't even live in their houses for years. Utilities. Paying for your utility bills are a great expense. Save on your heating bills by turning down the thermostat every winter. In the summer use the drapes to keep the house cool. Adjust the thermostat in rooms that aren't in use. Why are you paying the money for nothing? Switch to compact fluorescent lighting to save on your energy bills. Cut down your long distance telephone calls. Choose the right telephone plan and internet service provider for your needs. Do you really need that super speed internet or can you be content with something that is less fast but cheaper? There are many ways to save money on your main utilities. Decorating. Everyone wants to live in a beautiful house. But you don't have to go overboard to have an aesthetically pleasing house. Second hand shopping will be your most effective method of having an elegant interior decorating. You can also look at your old furniture and find ways to make it new again. You can paint that old cabinet and use it as an entertainment center. Your style doesn't have to be hampered by steep prices. You can still have that modern living room but without the obscene price tag. Just look for the bargain pieces and be patient in collecting. You may not have your ideal living room in one go. Appliances. Your large appliance are expensive to repair or replace. Will the energy savings from buying a new refrigerator unit cover the cost of buying a new unit? If you can fix the problem yourself do so. You would be surprised at how many seemingly technical problems are relatively easy to fix. Before buying a new appliance, you should take into consideration the cost of such a move. Repairing the unit might be cheaper. Take a while on your decision. There's no rush when it comes to saving money. Repairs. Calling for the repairman or the plumber can eat a lot into your savings. The cost of the service alone is expensive without even adding the cost of the materials. Ask for references and ask for an estimate. And like going to a doctor, ask for a second opinion. Don't settle for cheaper labor. It may not cost you as much but it will when you have to do the repair over again. References are very important.