How to Formulate a Perfect Household Budget?

Just as much as a country needs a budget, so do households. In fact, there isn’t much difference between the two – both have incomes and expenditures and shortfall too. Writing a household budget is not an exciting job, but writing down the budget on a piece of paper and adhering to it will save you money and the trouble, especially if you are in the habit of overspending. Formulating a perfect household budget may seem simple, however in reality; it is a little more complex than what you may have thought. Here are the steps involved in making a perfect household budget.

1.        The first step to writing a successful household budget is accessing your old records pertaining to your income and expenditure. The information may be strewn all over: TV bills, telephone bill, rentals paid, mortgages redeemed, gas expenses, food expense and some expenses you incur regularly but have no record of. Keep track of unpaid bills, incurred but not paid bills, and those forgotten too.

2.       The next step is determining your income. The first place to check for the information is your bank account. See where the money had come from. If it is salary, presume it will be regular, if from self employment, then you will have to calculate the average of the last six months or more. Discount those you don’t consider as unsustainable lest you may a wrong provision in your budget.

3.       The third step is the trickiest of the lot, because you need to consult your spouse and if you have college bound teens you need to talk to them as well. It is tricky because, this is the time when you will have to make compromises, yield to demands, refuse expenditures and prioritize your spending. There are simply so many expenses you cannot say no to and amongst them will be paying your home mortgage if you have any, paying utility bills, taxes, rentals. Then comes expenditures pertaining to your children’s education and finally food. The non priorities are of course the expenditures you can do without.

4.       Now sum up expenses and deduct it from your foreseeable income. If you have something left, all that good. Otherwise, take the non-priority expenses out of the budget for good, or consider them for the next month. If you have surpluses, consider transferring it to your savings and investments.

 

Writing a household budget is just one part of the story, the other of course is staying with it. Making provision for exigencies are important, don’t forget. You can never foretell someone in your family falling sick, or your car going out of service, provide for them too.

 

This is a guest post by Nathan Brown of offers.telcoservicesgroup.net, a site that offers savings and current information on at&t Uverse, as well as att.com services.