Creating a Household Budget by cmlang


									by: John Mussi

Sometimes it can seem as though daily expenses are getting out of control you know that you
should have enough money to cover everything, but it just never seems to work out that way.

If your financial situation seems to be getting worse with each passing month, don't despair; with
the aid of a household budget you should be able to quickly get things under control again.

All that it takes is a little bit of planning and the self-control to stick to the budget.

What is a household budget?

If you're not entirely sure what a budget is, it's simply a formal plan for the control of a
household's expenses and spending. A budget allows you to plan in advance which payments and
expenses will be paid at what time, and even decide which payment of your salary will be used
to pay individual payments.

A budget can also be used to figure approximately how much money you have left after all of the
bills and expenses have been paid, so that you'll know whether you can really afford to spend
additional money on impulse purchases.

First step in creating a budget

The first step in creating a budget is to determine exactly how much your core expenses cost, and
how much money is available each month to pay those expenses.

Make a note of your rent or mortgage payment, and look at old utility bills to determine the
average cost of electricity and other utilities. It might be advisable to lean your estimates a little
higher than the true average, so as to better cover more expensive months.

You should then write the payment due date of each of these expenses on a calendar, as well as
the dates when you or other bill-paying members of the household receive their salary.

This way, you can determine which expenses are due at what time, and whether you can wait for
your next pay period before you pay it.

Covering all of your expenses

Of course, there are a variety of other expenses that must be met every month that don't come as
standard bills. When working out a budget, it's important to remember to add in the amount that
you spend on groceries each month as well as an amount to pay for incidentals the various
expenses that can come up without you expecting them.

Make sure that you determine the approximate amount that you spend on groceries as well as
how often you buy them, and mark that down on your calendar.
Figure up your total expenses, and subtract them from your monthly income once you've
determined how much money you have left, set aside a small portion of this so as to help cover

Working savings into the budget

Of course, building up your savings can help things significantly down the road the only problem
is that it can be difficult to save money when you're working on a budget.

To help build your savings, you should put the money that you set aside for incidentals into your
savings; if it's needed, you can draw it out later.

You should also try to put a little extra into your savings at the end of each month, as a bonus for
staying on budget.

Sticking to the budget

The important thing to remember when working on a budget is that it isn't set in stone. Many
people worry when they get off of their budget, and this makes them skew the budget even more
before long, the budget is gone entirely.

Work on keeping your budget, but don't worry about it so much that you make it impossible. If
you stray, simply get back on next month.


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This article was posted on October 28, 2005

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