Steps to Create Your Household BudgetDecember 12, 2016 | Financial Wellness
- Calculate your total income: Add up the income from all members of your household. Sources of income could include: wages, salaries and tips, interest and dividends, rental income, Social Security benefits, etc.
- Determine all expenses: There are really two types of expenses- fixed and discretionary. Fixed expenses (such as a cable bill or rent payment) are due on a regular basis, and you typically pay about the same amount each time the bill comes due. Discretionary expenses happen at irregular intervals and fluctuate in cost. Start by entering the fixed expenses in your budget, then track spending for 30 days to see where discretionary dollars are going. Once you have an idea of discretionary spending, categorize those expenses and add them to your budget.
- Think about your goals: Now you have a better picture of how your money is flowing in and out. If you have more money going out than coming in, look at areas for adjustment, such as dining out.
- Stick to it: It may take a few months of tracking to establish a budget, so don’t be too hard on yourself at first. Set aside some “fun” money so you won’t feel too deprived or tempted to dip into money reserved for other areas. Remember, your goal is a budget that puts you in control of your spending and gets you to achieving your end goals.
Use these four tips to assist with sorting expenses and goals.
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