Household Budgeting

Household budgeting helps you control your spending and money for a better future!

The Fibre Pantry

Household budgeting is a crucial financial foundation for a sustainable future. Having a budget helps you manage your money, control your spending, pay off debt, stay out of debt and save more money. Because, without a budget, you don’t know what is coming in and out of your bank account accurately enough to be financially aware of the household. Resulting in relying more on your credit cards or loans to pay bills.

Household Budgeting - Infographic

Household Budgeting Worksheet Planning

Create or use a worksheet to organize your finances. You can find worksheet software like Vertex42 or It’s Your Money, or you can just use a piece of paper and a pen. Using a worksheet keeps your work neat and tidy, easy to read and when you want to re-evaluate your budget, easy to reference too. I use The Barefoot Investor books to help me.

Adding Your Household Income

List and add up all your reliable sources of income; Alimony, Child Support, Wages from jobs, etc. Notice the word reliable. If you get money from other sources but not on a regular basis, do not add these. This document should be something that you can depend on.

If you are self-employed and income fluctuates, use the average monthly income from the last 6 months as a stable estimate. If you can reliably predict the expected month’s income, then use this too.

Adding Your Expenses

List and add your expenses; mortgage/rent, property taxes, child support, utility bills, etc. Some of these will be fixed like mortgage/rent and child support, while others will be variable like water, electricity, and groceries. List the fixed ones and add them up first.

For the variable expenses, list the maximum amount you plan on spending on those categories and amounts you expect the bills to be. For example, groceries may be $500 and gas/petrol might be $150.

Use credit and bank statements to figure out how much u spend on the variable categories to help figure out common amounts. This includes take-out, Dr’s appointments, parking fees, etc.

Some expenses don’t occur each month. However, writing them down and their duration in a separate column will help you allow them in the budget when they become due. Annual expenses can be divided by 12 or semiannual expenses can be divided by 6 to give a monthly payment for them.

Calculate the Net Income

This is the total amount left after all bills are paid. It is preferred to be a positive number but write it down even if its a negative number anyway. Calculate this by subtracting your expenses from your monthly income and write down what is left.

Household Budgeting

Adjusting Expenses

If your net income is negative, it means you’ve budgeted to spend more than your income. You’ll have to correct this. Otherwise, you’ll run into trouble during the month.

Variable expenses are typically the first places you can adjust spending, e.g., eating out, hobbies, and entertainment. Even some of your fixed expenses can be adjusted, e.g., by reducing your cable or phone bill, canceling your gym membership, or not taking a vacation this year.

Evaluate your spending using a “wants vs. needs” analysis. Reduce or eliminate spending in those “want” areas to make more room for the things you “need” to spend money on.

Track Spending

Throughout the month, track your actual spending against what you budgeted. If you go over budget, doing this will help you figure out where you spent more money. In the future, you can take greater care not to overspend in that area. Or you may need to adjust your budget to compensate for the additional spending. If you increase your budget in one area, decrease it in another area to keep your budget balanced.

Making Changes in Household Budgeting to Save Money

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It can be easy to make small changes or big changes in the household to help increase net income and reduce expenses. Some ideas can be:

Reducing Water Usage – Take shorter showers, re-use mop water, and heat a jug of water to add to heat it back up, only do full loads of washing, or even water the gardens before 9 am or after 4 pm.

Cutting Power Usage – Turn off power points that are not in use, use timers on appliances that do not need to be used all day such as the front light (I use a wifi globe I can program), or even using the air conditioner when your uncomfortable instead of before a predicted temperature rises or falls.

Shrinking the shopping list – Plan ahead for the weekly meals and snacks, make as many dishes as possible in advance and store for ease of busy times for meals and snacks instead of buying takeout, and even make your own cleaning products like this miracle spray.

Be More Conservative – Walking to work or catching public transport not only cuts your gas/fuel budget, but it also helps the environment with sustainability and energy conservation.

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Have More Household Budgeting Ideas?

Leave a comment if this helped you be more money wise and INSPIRED! Let us know if you found more ideas that helped you, they could help other people too!

BE INSPIRED!

3 Comments Add yours

  1. Kathryn says:

    This is great info — something we all need to keep in mind!

  2. Lizet Flores de Bowen says:

    This is so helpful! we moved to the US a few months ago and we haven’t done a budget yet! Great info! Thanks!

  3. Great tips for staying on budget and saving money!

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