My belief is that a household budget is the answer to achieving financial goals and being able to enjoy more life with your family. Without a family budget, I really couldn’t imagine being able to take family vacations, or save for emergencies. Our budget is our spending plan. It’s our opportunity to set family priorities and make sure our money doesn’t control our lives. So, without further ado, here are 35 household budget tips to create a plan for your money each month.
Household Budget Tips
1. Create a budget with a household budget worksheet. This Monthly Income and Expenses template from Crown Financial is a good one to get started.
2. Involve your spouse in creating your budget. Make sure it’s something you both believe in, is realistic and you’ll hold each other accountable to each month
3. Review your budget each month and budget for irregular expenses. Does the car oil need to be changed this month? Budget for it at the beginning of the month.
4. Set aside savings for irregular expenses that probably can’t be funded with one month’s income. Christmas is a good example. Vacation is another one.
6. Spend just a couple of minutes each day tracking your expenses and categorizing them. It only takes 5 – 10 minutes if you stay on top of it! Some software will download transactions from your bank for you and auto assign categories. That’s fine, but I like doing it myself. It keeps me actively involved in managing our spending.
7. Set aside 20 minutes each week to meet with your spouse and talk about your household budget and spending decisions. Save all financial matters for this discussion time unless it’s an emergency. This approach will keep you from talking about money at the dinner table.
8. Your budget will never be perfect. Overtime, you’ll be able to review your spending history using personal finance software to learn about your habits and how much you spend in certain areas. This is great information to adjust your budget (or your spending).
9. Include age appropriate kids in budget decisions. Show them how much money is available for certain categories. Let them help in making a spending decision and show them how it affects the budget after money is spent in a particular category.
10. If you consistently overspend something is wrong. Either your budget is inaccurate, or you’re not following it. Don’t cheat your budget. It will catch up with you next month.
11. You can spend with cash or a credit card as long as you have a budget and follow it. Pay off your credit card every month if you choose to use one. No exceptions.
12. Don’t budget too many categories. Pick the major ones you need to manage closely each month: entertainment, food, clothes, etc. Make sure you have budget categories for your most important priorities too. There should always be categories for saving and giving.
13. For a 101 budget try using a bucket budget. Create one account for savings and giving, one account for bills and another account for everything else. Have your paycheck divided between these accounts. In doing so, you’ll always have money for the most important priorities and be forced to focus on managing your spending closely for everything else.
14. Use household budget software that also has a mobile app. Enter each transaction and categorize it after you spend. This removes the need to enter spending at the end of the day when you’re tired and saves even more time.
15. Use family budgeting calculators to help with difficult spending decisions. Crown Financial has several I like. I believe DaveRamsey.com has some too.
16. For those who don’t earn regular paychecks, create a budget and determine how much you need each month for living expenses, savings and giving. When you’re paid more than needed to cover your monthly expenses, save the excess so it so it will be there when you don’t receive a paycheck one month, or are paid less than what you need to cover expenses.
17. If you want to stick to your budget, don’t go into stores without a plan or purpose and try not to buy anything you didn’t intend to buy. Always go shopping with a plan!
18. Run reports in your financial software every few months and definitely yearly to see how your spending your money. You’ll be amazed to see how much you spend at the grocery store, eating out and in other areas. Can you take some steps to trim these expenses down so you can save more money?
19. Cut out bad habits that can cause you to spend too much money. Drinking excessively, smoking, coffee are among several things can cause you to waste a lot of money.
20. Budgeting is not a one spouse job. Both spouses must be involved. Both spouses must know how much money is available before spending and adhere to the budget. This prevents communication issues and arguments about money.
21. Budgeting isn’t just for people who have spending issues. It’s for people who care about managing their money wisely and want to save more, give more and build wealth.
22. Budget a buffer so you have room in case you overspend. It’s a good idea to leave an extra $50 or $100 in your account in case it’s needed. Forget that you have this buffer and try to increase it each month. You Need a Budget software (click here for 10% discount) has a built in feature to help you do this.
23. Use spending guidelines to help you plan your budget and also check to see if your spending is out of line. Crown Financial has some helpful guidelines to occasionally review.
24. It’s okay to budget using paper, spreadsheet or software. There’s not right or wrong answer. Figure out what works best for you and your family. Just budget.
25. Budget fun money so you can have some freedom to spend. Fun money is a no questions asked category and it’s your freedom to throw it away if you so choose.
26. Try budgeting with “Net Spendable Income” (NSI). NSI is your spendable income after taxes and giving. This approach helps ensure you always are able to give if that’s an important priority to you.
27. Make a list of all your regular re0ccuring bills and their typical due dates. If you get paid more than once per month know what paycheck will be used for each bill and budget accordingly.
28. Automated bill management with a service like Manilla. Manilla gives you reminders for when bills are due, lets you see them all in once place, reduces paper and let’s you pay directly from the Manilla website or your smart phone.
29. Create an idea list to make adjustments to your budget. List things in order of priority for decreasing spending, increasing income and selling things. Talk about these ideas with your spouse. Work together to incorporate them into your budget each month.
30. Remember that a good budget balances to zero. Income minus expenses must always equal zero. Every dollar must have a job for you to be in control of your money.
31. Don’t hesitate to meet with a budget coach if you’re having trouble. There are free coaching services that will help you analyze your spending and create a plan. They also provide assistance with paying down debt. Check out DaveRamsey.com or Crown.org for coaching services.
32. Don’t forget to consider a spending plan for common children expenses: summer camps, swimming lessons, sports activities, kids clothes, school supplies, snacks and fun. You may have to prioritize or reduce spending in other areas if they are important for your family. What children’s expenses are in your budget?
33. Don’t panic if you spend more than planned. Reduce spending in the current month in another category if you can to make it up, or know that you’ll need to reduce spending next month. However, overspending month to month will eventually make it difficult to live. Try to get control of it as soon as possible.
34. Create a plan to get out of debt. Fewer debt payments provides more money to allocate towards necessary expenses and your financial goals in your family budget. The more flexibility you have, the better. It’s called financial freedom.
35. Automate savings. Make sure you have a category for savings, but set up automatic deposits to your savings account so you aren’t tempted to spend this money.
There you have it – 35 household budget tips. What were your favorite or least favorite tips? And what are your family or household budget tips?