For some, running a home can be a bit of a juggling act. That is why it is always important to create a budget that is both realistic and achievable each month.
Creating a budget allows you to keep track of money. A budget can easily show you what money you have left spare, as disposable income at the end of each month. This keeps you on top of bills and helps you save money if that is one of your goals.
There are certain steps that you need to go through when creating your household budget. This guide will show you are:
First you need to set a time frame for your budget. This may be set by when you get paid or by when the majority of your bills leave your account. This could either be weekly, every fortnight or monthly.
During this next step, you need to think about what money comes and goes during the whole year. You will need to include regular outgoings and bills, such as; rent or mortgage, and gas and electricity.
A great way to do this is to look at your bank statements. This will give you a good idea of just how much you spend on any household bills.
Once you have worked out what outgoing you have, it is now time to add in your income. How much do you receive, over the time frame you have decided to use? If your income changes from one pay packet to the next, then work out the average and add it to your budget. Your income could also include benefits or casual work. Make sure you include these figures too.
Your main bills are paid and deducted from what income you bring in. By this point, you will know what money you have left to play with. This is called disposable income.
Now it is time to consider other living expenses, such as; food and clothes. You may need to make allowances at this point. Think about where you shop and what you buy carefully. Money could be saved by shopping at another supermarket or by buying budget brands as opposed to premium brands.
If, at this point, you still have money left, you need to consider what you want to do with it. If you want to pay off more debt, and become debt free quicker, you can now do that. If you want to save for a new car or as a deposit for a new home, you can do that too.
Once you have completed your budget, it is important that you keep it in view at all times. You can use it as inspiration. Make sure other family members use it too.
If you keep to your household budget, you can achieve much more than just simply a few more quid in your back pocket.