Summary
Where to start with a household budget?
- Positive approach: you are just taking steps that will improve your financial situation in the long term.
- Act with what you have: Don’t make excuses or delay tackling your finances.
- Review your bank statement: Review your bank statements carefully.
- Choose the method of household budgeting that is most convenient for you: You have the choice of, for example, a sheet in a notebook, an app on your computer, an app on your phone or an Excel file.
- Make your own template or use a ready-made one: If you use a ready-made template, adapt the form to your household.
- Record all income and all expenditure that you know about in your family.
- Be meticulous.
- For the first month, try not to change anything: Just record your expenses to get an idea of how the flow of funds is distributed.
- At the end of the month, analyse your spending: Where is the money spent most often? What do you spend the most on? Do you see unnecessary expenses? Are there savings left over?
- Plan your spending for the next month and stick to the plan.
- Revise/adjust your monthly budget if you find you have over- or underestimated your spending.
- Plan for large expenses that only occur every few months, e.g. seasonal expenses, insurance payment.
Don’t be discouraged if you fail to meet your target. This is not a failure, just a learning experience for the months ahead. Keeping a budget will help you learn and correct your buying habits.
As financial expert Dave Ramsey puts it: “Either you manage your money or the lack of it will always manage you”. The best way to build financial security is to work out how and where you spend your income, then make a plan – and stick to it! Of course, life can sometimes throw you off track, but that’s okay. As long as you get back on budget, a hiccup here or there won’t ruin your future financial success.
Good luck!