Setting up a household budget involves gathering information about the family's income and expenses and then entering the information in a printed ledger, electronic spreadsheet or budget software application, according to Mint. People should use a budget to evaluate spending, set goals and track spending, advises CNN Money.Continue Reading
To prepare for creating a budget, one should collect all the information available about the family's or individual's funds and then divide it into incoming and outgoing categories, suggests Mint. For example, details about incoming money appear on paychecks and earnings statements. Details about expenses appear on bills, receipts and bank statements. Next, the budgeter can further divide the items in the outgoing category into subcategories. For example, one might use "Monthly Payments" and "Discretionary Spending" as expense subcategories. Finally, the person can enter the monthly income and expense information in a ledger or spreadsheet. CNN Money recommends personal finance programs, which provide software tools for creating and maintaining budgets.
The next step after creating a budget is to use it regularly to monitor spending and set goals, advise both Mint and CNN Money. For example, someone who is often short on funds at the end of the month can set spending guidelines and identify expenses to cut so he ends each month with a surplus.Learn more about Household Budgets