"A budget is telling your money where to go
instead of wondering where it went."
- C.E. Hoover
Why Keep A Budget
Perhaps the single most important step you can take in protecting yourself and your family’s financial well-being is to take responsible control of your finances. Keeping a simple household budget helps keep you accountable for your spending, moving in a positive direction, and is an absolute necessity for staying focused-on and reaching a goal. To understand where your money goes - you need to track it.
What A Household Budget Can Help You Do
- Improve awareness of your financial situation.
- Free up cash to pay down high interest debt, create an emergency fund, or add to your savings.
- Increase the opportunity to provide yourself a financially secure and comfortable retirement.
- Identify areas where you can reduce expenses, redistribute funds, and better control spending.
- Track, redefine, and make improvements to your financial objectives.
- Teach your children “by example” the benefits of planned responsible spending so they’ll grow up knowing how to be more than consumers.
Define Your Financial Goal
Think of your budget as a tool for maintaining your financial health. The goal you set will be your motivation for creating a workable budget, and taking control of your financial life. The more specific you are in defining a goal, the more easily you can visualize it and measure your success. You can prioritize goals, set short- & long-term goals, and adjust them as your needs or financial circumstances change. The point is - to have a goal.
Fill Out Your Budget Worksheet
If you already have an organized filing system in place you will be able to access the information you'll need to record your expenses, and the process should go fairly quickly. If you need help in getting your papers organized EasyFile Home Filing System is a user friendly intuitive filing system designed to organize your personal, financial and household papers quickly and easily. When filling out your budget worksheet be as accurate as possible, to ensure you provide yourself a realistic picture of your current financial situation.
We created these FREE color-coded, easy-to-fill-out budget worksheets to simplify the process.
Budget Summary Sheet
Variable Expense Worksheet
PDF format - Print in black & white or color.
Review Your Budget Monthly - and - Evaluate Your Success
Take a few moments at the end of each month to compare the amounts you actually spend with the amounts you allowed. Couples should sit down together as partners to review the budget. Because you both come from different backgrounds with different expectations, you’ll probably have different ideas about saving and spending, as well as determining what items in the budget are absolutely necessary, dispensable, or negotiable. Take time to discuss and plan how your money will be managed and spent. To eliminate conflict, recognize the importance of both points of view. Any compromise between contrasting viewpoints puts you on common ground and can lead to unexpected but successful decisions.
Make note of any unplanned purchases or unexpected expenses. If you overspent - weather due to a miscalculation, an expense category you didn’t allow for, or an unrealistic budget amount - make adjustments. Move money from areas where you’ve over allowed to those coming up short. Identify areas where you can make improvements, even small ones. Your budget is a work in progress - one you’ve designed to help you reach a goal. It can, and should be adjusted, as changes occur in either your income or expenses.
Help Yourself Keep More Of What You Make
- Consider paying off high interest debt.
- If you must use a credit card, look for one that offers the lowest interest rate. If you currently have a credit card call your card issuer and ask for a lower rate; if you have good credit they may consider negotiating.
- Shop around for insurance quotes.
- Consider raising your insurance deductibles.
- Review your cell phone package.
- Review your cable package - especially pay channels.
- Consider bundling cable, internet, phones, etc. - many companies offer sizable discounts.
- Build an emergency fund to cover unexpected expenses.
- Look for coupons when shopping on the internet
- Buy used cars - many still have warranties but are considerably cheaper.
- Eating out is costly - watch for early bird specials, use coupons - and remember alcoholic drinks really add on the dollars.
- Pay bills automatically or online, to save both time and postage.
- Review the number of magazines and periodicals you subscribe to.Pay yourself first! You work hard for your money; make sure you keep it working for you. Your savings plan shouldn’t be an afterthought comprised of leftovers.
- Contribute the maximum to your 401k - their match is like free money!
- Open an IRA.
- Start saving early - with the power of compound interest no amount is too small, little bits can really ad up.
- Review your bank's checking & ATM fees. Look for a bank that waives these fees if you maintain a minimum balance, or sign up for direct deposit.
- Understand the difference between NEEDS and WANTS.