How Do I Start a Household Budget?

Frequent dinners out at your local posh eatery might taste good and cook up easy, but they can put a real drain on your wallet. While not on most peoples' lists of favorite activities, budgeting is an important process if you are trying to save money and preparing for your financial future. Although you will have to make some sacrifices, ultimately you will end up with more control over your finances and be able to enjoy the things that matter most instead of squandering your funds.

Step 1

Identify how you are currently spending your money. Make a list of how much are you spending on housing, food, utilities, clothing and any extras. Make sure to include taxes on your list.

Step 2

Determine what your total monthly spending is. Plug all of your numbers into a system to help you track them. Using personal finance software is helpful but not necessary. A spreadsheet program is a good alternative.

Step 3

Compare how much you spend to how much you make. Make sure that the money you're spending does not exceed the amount of money you earn.

Step 4

Decide where you need to make cuts. A good strategy is to categorize your spending into essentials and nonessentials. Decide which nonessentials are luxuries that can be cut out completely or used sparingly.

Step 5

Figure out how you can minimize essential spending, such as housing and food. Personal budgeting expert and MSN Money columnist Liz Pulliam Weston suggests making the most of your food at home and brown bagging lunches for work.

Step 6

Create your new monthly budget based on your income and your expenses. Pledge to stick with it. Make sure to set aside a certain percentage of your income for savings.

Step 7

Track your budget monthly. Tweak it as necessary, reevaluating your total plan annually.

About the Author

Jennifer Sable has been freelance writing since 2007. She has written copy for Pretty Me Maternity and frequently reports for 100 Ftse Index News in addition to other fashion and business websites. Mrs. Sable holds a finance degree from Yeshiva University and a Masters of Arts in public administration from New York University.