Household Budget 101: How to Control Your Expenses
Managing your finances is a must in running a household.
It's one thing that you can do to make sure you are able to provide for the needs and some of the wants of every member of your family.
It's also a way to help spouses get along better.
When you are able to meet your family's financial needs and obligations, you avoid fighting over money.
So how do you go about controlling your expenses and allocate enough money for what your family needs? Here is a checklist of what you can do: Record your expenses.
The first thing you need to know is how much you are spending on what items.
To find this out, open a spreadsheet and record all of the things your family spends on for the entire month.
You can designate categories like food, entertainment, education, utilities, grocery and so on to see how much of your expenses is given to each type of expense.
Record ALL your expenses, including those that are charged to your credit card.
Evaluate your spending.
When you have at least 1 month's worth of data on how your family spends money, you can now evaluate where most of your money is going to and where you can cut back.
Most couples who have gone through the exercise of recording their expenses are often surprised to find out how much of their money are going to things that are not important.
They did not realize how much they are "wasting" until they've actually sat down and put things down on paper.
Prioritize your expenses.
There will be things in your household budget that will be non-negotiables.
For example, you can only reduce the budget for your groceries so much.
The same goes for your utilities like your electricity, water and phone bill.
So prioritize your family's cash accordingly.
Factor In Your Savings.
Set a goal for your family to determine how much money you'd like to save.
Your savings should be an item in your household budget allocation and in terms of priority, should be listed as one of your non-negotiables.
Manage Credit Wisely.
Credit cards are convenient and when used properly, can allow you to augment your family's available resources.
However, you should continue to follow your family's budget when making purchases on your card.
Be prudent and try not to be tempted to buy things just because they are cheaper or there's a promotion on your card or the monthly minimum payment on your card is low.
Small things add up and interest rates on credit card debt is pretty expensive.
When you are able to control your expenses, you can put more into the things that are really important to your family such as your kids' education, buying a house of your own, or that family vacation you've always wanted.
It's one thing that you can do to make sure you are able to provide for the needs and some of the wants of every member of your family.
It's also a way to help spouses get along better.
When you are able to meet your family's financial needs and obligations, you avoid fighting over money.
So how do you go about controlling your expenses and allocate enough money for what your family needs? Here is a checklist of what you can do: Record your expenses.
The first thing you need to know is how much you are spending on what items.
To find this out, open a spreadsheet and record all of the things your family spends on for the entire month.
You can designate categories like food, entertainment, education, utilities, grocery and so on to see how much of your expenses is given to each type of expense.
Record ALL your expenses, including those that are charged to your credit card.
Evaluate your spending.
When you have at least 1 month's worth of data on how your family spends money, you can now evaluate where most of your money is going to and where you can cut back.
Most couples who have gone through the exercise of recording their expenses are often surprised to find out how much of their money are going to things that are not important.
They did not realize how much they are "wasting" until they've actually sat down and put things down on paper.
Prioritize your expenses.
There will be things in your household budget that will be non-negotiables.
For example, you can only reduce the budget for your groceries so much.
The same goes for your utilities like your electricity, water and phone bill.
So prioritize your family's cash accordingly.
Factor In Your Savings.
Set a goal for your family to determine how much money you'd like to save.
Your savings should be an item in your household budget allocation and in terms of priority, should be listed as one of your non-negotiables.
Manage Credit Wisely.
Credit cards are convenient and when used properly, can allow you to augment your family's available resources.
However, you should continue to follow your family's budget when making purchases on your card.
Be prudent and try not to be tempted to buy things just because they are cheaper or there's a promotion on your card or the monthly minimum payment on your card is low.
Small things add up and interest rates on credit card debt is pretty expensive.
When you are able to control your expenses, you can put more into the things that are really important to your family such as your kids' education, buying a house of your own, or that family vacation you've always wanted.
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