6 Steps to Build a Household Budget | Money Management
Finance

6 Steps to Build a Household Budget | Money Management

Firstly do you know that making a budget is key to a strong financial foundation? Yes, the household budget helps you manage your money, control your expenses and save your money. The household budget is the item list of your expected income and expenses that help you to track your spending and helps you to plan how your money will be spent.

Everyone needs money management skills. No one is born with budget planning skills. With all the expenses of running a household, it’s hard to make a family budget. Especially when the amount of money left at the end of the month is less than you want. It’s very important to look at household finance because it is the only way you can control the expenses. By making a proper budget you can track the monthly expenses that you are spending and helps to save your money. 

If you want to know how to create and manage your household budget, Here are some tips to create a budget. 

Do you know what budget does?

The budget helps and allows you to plan how you will spend and save money at the end of the month. And it can track your monthly expenses.

Major Steps to Create a Household Budget

  • Budget Planning and How do you Create a Household Budget?
  • Family Budget Example
  • Household Budget Categories
  • Things to Include in a Budget

Budget Planning and How do you Create Household Budget

Step 1: List Out Your Income Sources:

Make a list and add all types of household income sources. The payment you are getting like from a job, child support, pension, etc. But if you sometimes getting paid for your hobbies, don’t put it on the list because it’s not your regular basic income or monthly income.

Step 2: Add Your Expenses:

After adding all the reliable sources of income it’s time to focus on your expenses. Some expenses are fixed like rent, debt, loan installments, taxes, etc. But some expenses may vary such as electricity bills, water bills, groceries, household items, etc. Use bank statements to figure out how much you are spending on a monthly basis. Calculate your expenses by dividing the yearly expense by 12.

Step 3: Calculate Your Net Income:

Net income is defined as the amount you have left after paying your monthly bills. Calculate your net income by subtracting the monthly expenses from monthly income to get a clear picture of a monthly expense.

Step 4: Adjust Your Expenses:

After calculating the net income you can adjust your expenses. You can adjust the variable expenses like eating in a restaurant, outings, entertainment, etc. Also, you can adjust some fixed expenses like reducing phone bills, gym membership, etc.

Step 5: Choose Your Budgeting Tool:

Most of the people use to record the monthly expenses on paper or notebook. Using this type of budgeting tool is just as accurate as an electronic budgeting tool. But the Finance Tracker App makes the job easier. It reduces errors too. Instead of manually writing the budget use Finance Tracker App or any other online software for an accounting of each transaction on a regular or monthly basis. 

Step 6: Track Spending:

By tracking your spending you get a clear picture of your monthly spending. If you do this, it will help you to figure out where you spent more money. It is the best method to track your actual spending against what you have budgeted.

 

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Family Budget Example

When it comes to the financial scene the family budget is a must-have tool. It could be monthly, weekly or yearly budget. It helps you to know how much you are earning and how much you are spending.

By creating a budget you get satisfied and prepare for upcoming emergencies by saving. There are following software and apps to track your expenses Takefin Finance Tracker App offers you great budgeting tool, in that you can record or track the income and expenses coming in and out of your account.

In this budget example, there are two categories i.e. income and expenses. Income includes the money you earned and expenses include money you spend on items like food, clothing, entertainment.

 

CategoryMonthly Budget AmountActual AmountDifference
INCOME:
Income$872$810$62
Interest Income$232$196$36
INCOME SUBTOTAL$1,104$1,006$98
EXPENSES:
Taxes$386$397($11)
Rent$298$239$59
Groceries/Food$121$100$21
Clothing$66$60$6
Shopping$55$46$9
Entertainment$44$44$0
EXPENSES SUBTOTAL$970$886$95

Household Budget Categories

No matter how much money you have, everyone needs a household budget. This makes you know how much money you have coming in and how much you are spending or going out and where it is going.

Making a list of budgeting categories is a great way when creating and managing a budget. Include all the monthly and yearly expenses in the budget category to know about the financial scene.

Here are the Household Budget Categories:

  1. Housing: Rent, property tax, household repairs, bills, housing utilities.
  2. Utilities: Water, electricity, phone, cable, internet, garbage.
  3. Clothing: Adult clothes, children’s clothes, adult shoes, children’s shoes.
  4. Medical: Dental care, medical care, special care, medicines, medical devices.
  5. Transportation: Gas, tire, petrol, diesel, oil changes, maintenance, car payment, repaires, parking fees.
  6. Insurance: Health insurance, life insurance, renter’s insurance, homeowners insurance, vehicle insurance.
  7. Personal: Gym membership, subscriptions, salon services, hair cutting, cosmetics.
  8. Household items: Toiletries, detergents, tools, dishwasher, cleaning supplies
  9. Education: School fees, college fees, children’s school, books, copies, your college.
  10. Entertainment: Movies, games, alcohol, bars, concerts, vacation.
  11. Gifts: Christmas, Thanksgiving, birthdays, weddings, anniversaries, special occasions.
  12. Debts: Home loan, personal loan, vehicle loan, student loan, credit cards.

Build Your Household Budget With Finance Tracker App

An Ideal Budgeting app must have every type of expense tracking option according to expense categories.

 

If you are planning to build your household budget with an ideal budget app that has an endless number of options available in it, so in that case you need to plan your household budget with TakeFin Budgeting App.

 

Takefin Finance Tracker is a smart app that tracks your expenses and manages the financial records with ease. This finance tracker app allows you to track, add, and monitor your every expense. This ideal budget app helps you to convert the financial data into digital records. Add any type of expenses and categories them, it will calculate the data. This app is ideal for both household or personal finance tracking and business tracking too.

 

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Hayat01
Takefin is the solution to your financial management needs. Takefin provides you the Best Personal & Business Expense Tracker App. This Smart Finance Tracker App allows you add, track, and monitor finance for small business enterprises and individuals effortlessly.It is ideal for both business and personal finance tracking.
https://takefin.org/

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