Home Budget – Where To Start
Creating a home budget -- and perhaps more importantly, sticking to it -- is one of the most difficult but rewarding tasks for any family. Once you have a firm grasp on the real nature of your monetary allowance, it will be much easier to accomplish the goals and dreams that you set for yourself. Because of this, it is important to start work on a home budget for your family today.
The first place to start is always from the beginning. How much do you actually make? A good way to get better acquainted with how much you can spend is by analyzing how much you have to spend. So take your after tax income and divide it by 12. You can also divide it by 52 and 365. Then you will have how much you make per month, week, and day. The easiest number to work with will be the monthly income, because many payments are also on a monthly pay pattern.
The next step in figuring out your home budget will be to figure out all the expenses that will occur every month, from rent to utilities to that ever-present cell phone bill. Do not forget about any ongoing medical or insurance payments.
Once you have added all these numbers up you have what is often referred to as the nut. At this point you can subtract the monthly nut from your monthly after tax income, and you have the amount that you will be able to spend of food, clothing, and extras -- travel, nights on the town, etc.
Now take a look at what it is that you want to do with your money. Do you like to travel? Do you need to save up for a new car, or put money away for your child's education? Whatever it is that you need to spend, something will probably have to be taken away, or put into check.
Good questions to ask yourself are, How many times a week do I need to eat out? Can I bring coffee or a lunch from home, rather than buying expensive lattes and meals? Do I need all these CD's, or can I limit myself to one or two a month?
See what expensive things there are in your life, and maybe there will be a little bit more room in your home budget for the things that you have always wanted but never felt were within your reach.