Q:

How do you create your own household budget?

A:

Quick Answer

To create a household budget, calculate all outgoing and incoming money, separate outgoing money into categories and allocate all transactions to a spreadsheet, ledger or budget software table. Be sure to include some extra room for unplanned expenses, suggests US News.

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Full Answer

Families and individuals can use the following steps to create a household budget.

  1. Save receipts
  2. Save all receipts, bank statements and bills for 30 days to have a good record of all outgoing and incoming money.

  3. Calculate expenses and income
  4. Use the receipts, statements and bills to calculate all expenses for the month. Allocate these expenses into categories such as housing, utilities, food, transportation, insurance, debt repayment, clothing and health care. Allocate some extra funds to emergency costs such as car repairs.

  5. Add the transactions to the budget
  6. Add all monthly transactions to a paper ledger, Excel spreadsheet or budgeting program.

  7. Set goals
  8. People should always set financial goals and work them into the budget, according to Today's Parent. They can then adjust and prioritize items on the budget as necessary.

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