by J.J. Morgan
For some, developing a household budget is akin to taking a trip to the dentist. We know we should just do it and get it over with, but we really like to procrastinate.
Most people know a budget is a good idea, but even if they get through the pain of making one, they often have trouble sticking to their monetary outline. Unless you are one of the privileged few who can afford not to think about your finances, you probably need some sort of budgeting in your life. Splurges, unexpected charges, and casual overspending are what can really drive a person under, not routine weekly grocery trips or cable bills.
There is sometimes a stigma associated with the word “budget” because it implies that our funds are indeed limited, so some would rather call the rose by another name like “spending plan.” Either way, being on a budget is just smart—and nothing to be ashamed of.
10 Tips for Creating a Household Budget
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Divide your goals into short- and long-term categories. Short-term goals might include buying a new pair of shoes next week, choosing only eating out twice a week this month, or identifying a new movie release to take the family to. Keep these short-term goals in line with your Big Picture. Your short-term thriftiness will pay off when you start thinking about long-term budgeting goals. Long-term goals might include a vacation the following spring that eating in made possible. This category should also include expenses you know you’ll have to make, like ensuring you have a little stash put away to get you through the holiday gifting season without looking stingy.
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Involve Your Whole Household
Being part of a single person household makes this tip a lot easier, but if you have a spouse and/or children, create a budget together. If everyone feels committed to the budget, it’s more likely that you’ll keep one another in check. You can discuss with everyone that they may be asked to make sacrifices, and work through any issues that might arise.
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Budget In Fun
A budget that leaves no money for an occasional family outing at an amusement park is designed to fail. Your budget should help you suceed, not put you in a bind. The point is to budget in splurges, rather than just pushing them out of sight and out of mind and then finding yourself surprised at that wayward charge your budget didn’t account for.
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Make the Effort to Save
Most people look at saving as putting away money for a rainy day. But a better way to look at it is putting away money for a nice vacation. Saving pays. Once the piggy bank is full you’ll be able to enjoy something you’ve always dreamed of doing. Much better than new DVD you just had to have, right?
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Take Inventory
If you don’t know where your money goes, how do you expect to manage it? You can do this with an Excel spreadsheet or on a pad of graph paper. The choice is yours. Check your online statements from your bank to get some general numbers, and use available online software that can chart your spending over time. You’ll be able to compare this month’s spending to the previous ones to see if you’ve overstepped your budget boundaries. If so, rein yourself back in.
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Distinguish Between Wants and Needs
Buy what you need first. That means making sure you have food, water and shelter. Go grocery shopping before you go to the mall, and pay your rent before you buy that jetski you’ve been wanting for all of 36 hours. Wants belong in the “what’s left over” category.
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Expect Changes
There are always going to be unexpected fees and fines. You don’t know when you’ll get a traffic ticket, when your pipes might spring a leak, or when you’ll come down with a cold and need to co-pay for some antibiotics. A comfortable cushion that you only dip into during an emergency can help you cope with the unknown. For what you can foresee, try to look as far down the road as possible and establish which aspects of your finances seem more unstable than others.
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Get Rid of High Interest Debt
Focus on identifying high interest-rate debt and work on paying that debt off. This is a priority, no if, ands or buts about it. Your future budget should ensure that you are spending only what you can actually afford.
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Find a System that Works for You
Everyone has a different budgeting style and a different method of tracking their money. It could be the envelope system, a bank, online money management tools, or maybe a good friend or family member who will sit down with you and look things over. If your method works for you, use it.
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Stick to It
Creating and sticking to a budget that works won’t be easy, but in the end it will help you make the most of your hard-earned money.
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Have budgeting tips of your own? We want to hear from you! Please feel free to comment or give feedback in the box below!
Author Bio: J.J. Morgan is a freelance writer , and Editor of Smexy Mom. She also Owns Parchment, a custom stationery boutique and online store catering to celebrity clientele since 1968.
