Fortunately this is far from the truth because creating a household budget is nothing more then a "cash flow plan" that simply tells your money what to do. And what you choose to do with your money is up to you but a budget helps you determine the best course of action.
When you make a personal household budget there are two important tips to keep in mind. The first is to just get started. This can be the biggest problem for most people for any number of reasons. But the reality is that money budgeting is not really all that hard and once you get the hang of it you'll wonder why you weren't doing it sooner.
The first time you go about creating your household budget keep it simple. A notebook and pencil are all you really need to get started. By listing out your monthly income and expenses you can start to get a picture of what your money is doing. Income is fairly simple, just look at your pay stubs or bank statements to get a good idea of how much money you have to spend each month.
The most important part of your new household budget is the expenses. You need to make sure you leave nothing out so it can be worth the time to go back through you check book register, bank statements, and receipts to make sure you get an accurate reflection of what you spend money on each month. To get started you might want to divide your expenses up into the following four categories.
1. Housing: mortgage, rent, utilities, property taxes, insurance, etc.
2. Work: transport, parking, work clothes, lunches and if you have children, day care.
3. Living: food, clothing, medication, insurance, etc.
4. Personal: entertainment, newspapers, magazines, alcohol, gifts and education, etc.
This is a good starting point but how you decide to categorize your budget is up to you. Just be sure to write it all down and then add up your income and expenses and see where you stand. If you are living paycheck to paycheck there is a good chance you spend more then you make and your household budget will show you exactly where that money is going. It is here that you can start making adjustments to your spending habits and start freeing up all that money that seemingly is going to waste very month.
The second tip to keep in mind is motivation. Most budgets get thrown to the wayside after a couple of less then successful attempts at the process. The thing is you won't do it perfectly the first time, or the second time, but by around the third monthly go around you'll have a better handle on it and you'll start to see progress.
This is a process that does take some time but as your financial situation changes for the better it will get easier to work that budget every month. As you begin to set monetary goals and meet them instead of wondering where all your money went you'll see that creating a household budget is definitely worth the time you have put into it.
Tray your Household Budget Manual
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