Tips on How to Budget for a Household

Track your spending using statements and receipts.

Track your spending using statements and receipts.

A household budget sounds as painful as getting a root canal to many people. The numbers and perceived spending restrictions scare off some couples. Creating a household budget takes some time, both initially and to monitor it each month, but it can also help reign in excessive spending as you reach money-related goals.

Track Spending

Looking at your current spending helps you create an initial household budget. Keep all your receipts, bank statements and credit card statements for a month. Review the different categories of spending, such as food, entertainment, utilities, housing and auto expenses. These estimates give you a general amount to start with in those areas of the budget. Tracking your spending also helps you identify areas you can cut if your budget is out of balance.

Be Realistic

The amount you should spend and the amount you actually spend in certain areas of the budget often don't line up. Fixed expenses such as rent are the easiest to budget, but varying expenses, such as entertainment, food and clothing, are more difficult to estimate. You might also be more tempted to go over the budget in those areas. When creating your budget, give yourself enough leeway in the variable areas so you can realistically stick to the budget.

Wants Vs. Needs

The difference between wants and needs is a fine line in most budgets. An upcoming wedding makes you feel like you need to buy a new outfit, when you likely have something in the closet that will work. When creating your budget, identify the areas that are wants versus the areas that are needs. For example, your utilities and housing expenses are needs. The clothing and entertainment budgets fall under the "wants" category. The wants in your budget are the areas you should look to first when cuts need to be made.

Set Goals

Financial goals help customize the budget based on your circumstances. For example, if one of your financial goals is to pay off credit card debt, your budget would reflect that goal by allocating extra money toward credit card bills. If you want to build an emergency fund, the budget should include a section for money directed toward the savings account. Think about where you want to be financially over the next few months and years. Determine how to achieve these goals and how the budget can get you there.


About the Author

Based in the Midwest, Shelley Frost has been writing parenting and education articles since 2007. Her experience come from teaching, tutoring and managing educational after school programs. Frost worked in insurance and software testing before becoming a writer. She holds a Bachelor of Arts in elementary education with a reading endorsement.

Photo Credits

  • Checking credit card statment image by Elzbieta Sekowska from