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Budget

Guidelines Household Budget

First, List All of Your Income

Make sure that you cover all of the bases, not just your paycheck. If you receive a regular income from investments, alimony, child support, royalties, or retirement income, list the income you receive from those sources as well. If you have a permanent part-time job, add it to the list. With temporary jobs, sales, and freelance income, create a conservative estimate of what you can expect to make on a monthly basis. Realize, however, that you may have to change your budget if these sources of income dry up.

Next, List Your Monthly Bills

At the top of the list should come your housing payment, be it rent or mortgage. Utilities should come next. Since electricity and gas bills often fluctuate with the seasons, you need to average them to come up with a monthly estimate. Taxes, insurance payments, and other annual or semi-annual payments can be averaged on a cost-per-month basis. If you put aside the money for these expenses every month, those expenses will not cause you so much stress when it comes time to pay them.

Estimate Your Monthly Food Bills

Food prices often fluctuate with the seasons as well. Make your estimate is on the high side so you make sure you will have enough money to feed yourself and your family. If your estimate is high, you can reward yourself later. The money you save can go toward an item you are saving for, or toward a fun trip or other luxury item. Of course, the extra money saved can always go towards a savings account as well.

Factor in Transportation Costs

Whether you have your own vehicle or use public transportation, you will need to estimate your monthly cost. If you have a vehicle, list the monthly lease or loan payment, as well as insurance, maintenance expenses, repairs, and fuel costs.

Add Your Credit Card and Loan Payments

If you have credit card debt or other loans, list your monthly average payment. If you can squeeze a little more out of your budget, try to put it here, so you can work toward a goal of being 100 percent debt-free. Make sure, however, that you do allow enough money to pay these every month so your credit score will not drop. A low credit score may mean higher insurance payments or not getting a higher-paying job, so making sure your bases are covered here can save you money in other categories over the long run.

Don’t Forget Long-Term Savings and Fun

If you are saving for a home, a car, or a vacation, set something aside every month for these long-term goals. It is also important to include a little each month for something that will make you happy, so you will be encouraged to earn more. Rewarding yourself for your hard work keeps you from burnout, two factors that can kill the joy you get from a job well done. It will also keep you motivated to stick to the goals that you have listed in your budget.

Manage Your Debts In Easy Steps

First, you need to pay all the available balances that you can pay. For example, if you have a credit card debt, pay the full amount. This will help you adjust your entire budget for the whole month. You will not longer have to worry about the statement. Of course, you need to sacrifice a little when you pull money out of your budget. But take note that paying the full credit debt will relieve you from interest rates. Interest rates eat up a bulk of your credit payments. In fact, you are actually just reducing your original debt in minimal amount. So the trick is to pay the entire debt whenever the statement comes in. It will also help you manage your existing money better.

Second, do not spend on things that are not very important. Most of the time, people use their credit cards to pay for emergency spending. This is the right way to use it. However, there are some who use it for nonsense spending. For example, one may be attracted to buy a new phone. It may cost several hundred dollars to purchase. Using a credit card, it means you are extending the amount because of the interest. So if you still have a working phone, there is no need to buy one. If you cannot help it, then use only cash values. Never use a credit card for such splurging as this will not benefit you at all.

Lastly, you need to reduce your reliance on debts. If you currently have existing debt accounts, do not add more. You will only have stacked debt accounts later. If you are still not finished paying for your loan, do not get another one. If you haven’t paid all the dues in your credit card, then do not use it yet. Until you have cleared out all your accounts, do not add up more debts. However, there are moments when we have to acquire money in order to pay for important things. This is acceptable and you are allowed to apply for a loan. But make sure that you minimize the fees and interest rates for them. This way, you can easily save more money so you can pay for them in the future.