Household budget planning is among the most important yet dreaded responsibilities of adulthood.
And if you struggle to create and keep to a budget, then read on for our best tips.
1. Set Goals
Keeping to a budget can be difficult and unmotivating unless you have financial goals that you’re working towards.
Set some immediate financial goals, short term, and long term goals.
Some examples of immediate goals include:
- Pay off a credit card
- Buy an appliance
- Have an emergency savings fund
Some examples of short term goals include:
- Buy a new car
- Go on a big vacation
Some examples of long term goals include:
- Buy a home
- Start a business
Determine how much money you’ll need to reach your goals.
The money you need will come from saving each month and eliminating unnecessary expenses.
2. Identify All Your Income and Expenses
Record all your sources of income and their timing on a google sheet. Next, record all of your expenses.
Subtract your expenses from your income and what remains can be set aside for your goals.
Ideally, you will be able to eliminate or curb some of your expenses so that more of your income can go towards meeting your goals.
Some expenses can be variable. Do your best to predict what they’ll be so you can stick to your planned budget.
There are tools available that can help you calculate gas usage, electricity, and this tool even helps you calculate propane usage.
Predicting expenses can help you set a more realistic budget.
3. Wants vs. Needs
One of the best ways to trim your expenses is to identify your needs and wants.
Some needs might include rent/mortgage, utilities, phone bill, groceries, transportation, etc.
Some wants might include streaming services, eating out, regular clothing purchases, etc.
Wants are usually things that you enjoy but could live without.
Consider whether your wants prevent you from reaching your financial goals. And if they do, it might be worth cutting them from your budget.
4. Save Every Month
Make room in your expenses for a set savings amount.
Most experts recommend that you have anywhere from 3-6 months worth of your salary in a savings account in case of an emergency or job loss.
Having an emergency fund can eliminate a lot of money-related stress.
Many people report that it’s easier to reach and spend money on their goals if they’ve already got some saved.
5. Keep Records
One more important part of household budget planning is keeping records. You can use a google sheet, a notebook, or another form of record keeping.
Record every single transaction. That will make it easier to track your money and prevent overspending.
Household Budget Planning for Success
Household budget success is all about discipline, remembering your goals, and keeping records.
You don’t have to wait to reach your financial dreams. They can be a reality if you stick to your budget.
What will you be saving for first?
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