Budgeting household bills is an important step when two people get hitched or shack up together. You can avoid a lot of arguments and spats by working together on your household budget. Start out by cutting back wasteful practices. You don't always need to eat dinner out on Friday and Saturday nights, and those daily lunches downtown for work can really add up. Calculate how much you both spend on frivolous and unnecessary things. Label these expenses entertainment and miscellaneous.
Get out both of your most recent pay stubs. Add up the amount that both of you net each month, then write it down on a notepad. Add any income you earn from a side business, but first subtract out your estimated taxes. List only regular business income -- not occasional earnings from a neighborhood garage sale or the like.
Take out all of your latest bills, like car payments, cell phone bills and bank and credit card statements. Separate all bills by different types of expenses, such as mortgage, car insurance and student loans. Make a list of all your expenses. Kiplinger.com advises dividing your expenses into two categories: variable and fixed expenses. Put bills such as the mortgage and car payments in the fixed expense column. Record clothing, gas, groceries and electric bills, for example, under variable expenses. Convert occasional expenses like car repairs and doctor visits to an approximate monthly amount. Add up all of your household expenses, including entertainment and miscellaneous expenses.
Subtract your household expenses from your net monthly income. Write that figure down, which is the money you have left over each month. Take out the tissues and have a good cry if you are spending more than you are making. Then brace yourselves and get ready to cut some of that spending.
Write down how much money you want to have left over each month. Make that number your goal when cutting your expenses down.
Enter your income, variable expenses and fixed expenses into your budget software. Observe which variable expenses are much higher than the software recommends. Look at your clothing expenditures, for example, which is one variable expense that may be excessive. Write down all variable expenses that exceed the budget software's recommendations.
Create a new household budget based on variable expenses that are too high. Make sure you include your entertainment and miscellaneous expenses. Cut the variable expenses to the recommended amount, if possible. Calculate how much extra you will save per month by cutting these excessive variable expenses. Continue to cut your variable expenses until you have the money you want left over each month.
Items you will need
- Pay stubs
- Copies of bills
- Bank statements
- Credit card statements
- List of bills
- Budget software
- Go over your fixed bills periodically. Look for bills that may be paid off soon. Pay extra on these bills, if possible, to get them paid off. Pay the lower balances off first, then work on paying off the next lowest amount. Adjust your monthly budget as needed.
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