Creating a solid household budget is the beginning of a happy financial life. Following a smart budget means you’ll always have the money you need.
Household Budgeting- All for the Best
Let’s start with step by step planning from the basics of household budgeting.
To begin with, jot down your total monthly salary and all the expenses that are fixed on a monthly basis like the rent, EMI, insurance etc., against it. But there are some other expenses incurred on a monthly basis that are variable, still essential like the phone bills, medicines etc. After finishing the step of enlisting the important expenses, list some other not so essential overheads in a month like eating out, hobbies etc.
Run through your last month’s spending tracker in your head to see if you have missed out anything. For all those things or activities that do not occur every month like holidays, gifts etc., keep away some money by dividing these expenses in 12 equal installments to see how much money is required on a monthly basis.
Now, it’s time for you to add up all your expenses and see if there is still some money remaining with you. Even if your expenses have outrun the income, do not worry as this is what home budgeting is about. Identify and analyze where you can make certain cuts.
You need to identify which items can you get away with altogether and which ones can be deleted for a while. Keep scrolling through the list to find any such changes till finally your expenses come down and your income dominates. Even on a daily basis keep track of your spending and by the end of the month compare notes to see if you have stuck to the plan or not. It might sound impossible to balance the expenses with the income but for sure it’s not impossible. A few changes here and there make a hell lot of a difference and makes life much easier!
Some household budgeting tips:
1. Understand the concept and importance of income and outflows.
2. Plot the fixed and the variable expenses to identify the avoidable and the unavoidable ones.
3. Bring the expenditure lower than the income by curtailing the unnecessary expenditures as “a stitch in time saves nine”.