How to Manage Household Budgets

by Candace Webb, Demand Media
    Managing a household budget can become second nature with practice.

    Managing a household budget can become second nature with practice.

    Managing a household budget can be about as fun as a root canal if you allow it to consume your life; however, the faster you and your partner get on the same page with regard to spending, the faster you can put a stop to those pesky spats about money. Once the household budget is set up, managing it only takes a few minutes a day and will keep things moving smoothly in the bill department.

    Items you will need

    • Computer
    • List of bills
    • List of monthly income

    Step 1

    Determine what your monthly income is. Remember to include not only both of your salaries, but also any additional income, such as child support and investment income. Only include regular, consistent, revenue streams. Any additional income such as occasional payments for side jobs or freelance work should not be counted and should be invested into savings or investment portfolios.

    Step 2

    Note all recurring monthly, quarterly, semi-annual and annual household bills. This should include rent/mortgage, car payments, insurance payments, utilities, food and anything else that you have to pay for on a recurring basis.

    Step 3

    Examine credit card statements and decide how much you want to pay on each one each month. Be sure to include enough of a payment to reduce the principal so you are not paying interest only.

    Step 4

    Using a computer spreadsheet or a notebook, mark in each month what day the bills that are due that month will be paid. Remember to give yourself a few days leeway. For example, if your power bill is due on the 15th of each month mark it to be paid on the 10th. This provides you with a safety net if you ever have to juggle a few days here and there. This does not mean postponing the bill because your favorite shoe store is having a sale.

    Step 5

    Discuss and decide how much you and your partner are going to put into savings and investments each month. Treat that savings account as if it were a monthly bill and place it on the calendar for payment.

    Step 6

    Provide a weekly dollar amount that will be used by each of you for incidentals such as gasoline, lunches out with co-workers, stopping by the movie rental store and other things that will come up. Make this amount reasonable, while at the same time tight enough that it will not interfere with the savings account or the paying of regular bills.

    Step 7

    Check the calendar at the beginning of each week to note what bills are due. Establish a routine such as sitting down every Monday night and making out the checks or going online to take care of that week's obligations. Once the bills are identified, the income is there and the routine is established, you should be able to manage the household budget in about 30 minutes a week.

    Step 8

    Wait until you have saved enough to pay three to six months worth of bills before making any unnecessary purchases. Once you have the cushion set aside, you can open another savings account to deposit money earmarked for specific purchases.

    Step 9

    Set aside time and money to reward yourselves for sticking to the budget. Each quarter you can plan an expensive evening out, at a nice restaurant or a trip to a great new theater production to celebrate your budget diligence the rest of the time.

    About the Author

    Candace Webb has been writing professionally since 1989. She has worked as a full-time journalist as well as contributed to metropolitan newspapers including the "Tennessean." She has also worked on staff as an associate editor at the "Nashville Parent" magazine. Webb holds a Bachelor of Arts in journalism with a minor in business from San Jose State University.

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