Making a Household Budget

I think setting a household budget is one of the first and easiest ways to help you start saving money. If you don’t know how much you are spending, how do you know if you are saving? There are several things I think are very important to setting up your family budget:

• Do it with your spouse if possible. It is important for you to both know what is going on. One person will probably gravitate towards actually paying the bills, but you should both set the budget and know where the money is going. This keeps one person from being “the spender” and the other “the enforcer”.
• Be honest about your spending. You might want to track your actual spending for a month before you try and set a budget. This will help you know what categories to include and what realistic limits you should set.
• Add a miscellaneous category. There will always be things that come up that don’t fit into a category and you don’t need to freak out if you have to get your ink cartridge filled to print more coupons!
• Stick to cash!! I know for some people it works to have a credit card and pay it off every month, but here is the deal. You still owe someone money and if you lost your job today or something major happened, you would still have that bill to pay. If you pay with cash, you owe no one and don’t have to worry about that bill. We have always used envelopes. We put our budgeted amounts of cash into envelopes marked for those categories. When the cash is gone, there is no more spending!
• Stay on top of your finances. Keep your checkbook balanced and keep up with your receipts!
• Base your budget on your pay schedule. If you get paid 2 times a month, pay your bills 2 times a month. That way you aren’t always wondering about bills or forgetting to pay one.
• Have a way to track your spending. This will help you see how much you are saving as well. You can get the Quicken Software for your home for as little as $25 HERE . This can help you build your budget, set up your bill pay schedule, balance your accounts and easily track and analyze your spending.
• Don’t get discouraged. If you overspend or get off track, it is not the end of the world. You are still doing better than you were before. Just get back on track as soon as you can and keep going. It is just like losing weight. One brownie doesn’t mean you trash your diet:)

One of the best resources my husband and I have found is Dave Ramsey. We have read several of his books, listened to his radio program and watched his teaching. His theories aren’t rocket science but they work. I even have the Dave Ramsey Designer Envelope System (wallet) that has the envelopes built right in it. I love it!! You can check out his website HERE and get free downloadable forms and help HERE (scroll down in the middle section to the bottom right)!

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