How to Prepare a Budget for Your Home

The first step to resolve your money problems is to talk about them.

The first step to resolve your money problems is to talk about them.

Preparing a budget for your home may not seem romantic, but it might actually improve your love life. Think about it: most couples fight about money. In fact, money is one of the top reasons couples argue, sometimes causing them to untie the knot, according to SmartMoney. The goal for creating a budget is to gain control over your finances, achieve financial security and meet your long-term goals. Talking about money is a start; preparing a budget for your home can seal the deal. So, grab your partner, prepare a household budget and enjoy yourselves when you are through.

Track how you and your partner are currently spending money. List every penny you spend for a week to determine where your money is going.

Review your latest bank statement so that you know how much money you and your partner are bringing in and how much you are spending on regular monthly expenses.

Write down your budget so that you can see it in front of you. To make things simple, go with “The 60 percent Solution,” suggests MSN Money. Your essentials, such as food, shelter, clothing (this means essential clothing – not that adorable new sequined sweater you saw when you were out) and taxes come out of the first 60 percent of your total and combined pretax income. You have 10 percent left for each of four categories – retirement savings, emergency fund (or repaying debt), short-term savings for expenses that crop up, such as car repairs or birthday gifts and fun money.

Reduce your spending if you are spending more than what you make. For example, if you purchased a car that you really can’t afford, you might have to sell it. If you eat out a lot, start cooking more and start bringing lunches from home to work. Make coffee in the morning instead of splurging on that espresso macchiato.

Check your insurance policies, which include health insurance, life insurance, homeowners’ or renters’ insurance and auto insurance. Make sure that you have enough coverage. You also may discover that you have too much coverage and you can cut back, saving you money.

Be flexible with your budget and make changes as needed. Revisit the budget at the end of each month. If you have overspent in a category, you can pinpoint the area immediately and make changes to your budget if necessary.

Check out barometers that allow you to compare what you spend on housing and other big expenses to what other people your age spend., for example, offers a Financial Health Tool that allows you to see how you are doing in five key finance areas.


  • If you have a lot of credit card debt, you might want to pay that down before you start putting money in savings.
  • Use personal finance software to help you to better track your expenses.

About the Author

Laura Agadoni has been writing professionally since 1983. Her feature stories on area businesses, human interest and health and fitness appear in her local newspaper. She has also written and edited for a grassroots outreach effort and has been published in "Clean Eating" magazine and in "Dimensions" magazine, a CUNA Mutual publication. Agadoni has a Bachelor of Arts in communications from California State University-Fullerton.

Photo Credits

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