Tips on House Budget Planning

Congratulations if you and your partner have finally decided to take the reins of your finances and establish a household budget. Creating a household budget will take a lot of planning and organization, but it is an essential step to achieving financial freedom and success. Once you have the plan in place, follow it to the letter so you can reach your money-related goals.

Hold a Meeting

When creating a budget plan for your household, it's important that both you and your partner are on the same page. So before you take another step, sit down with your loved one to discuss your goals and concerns. List what you've discussed just as if you're taking minutes at a formal business meeting. In fact, it's a smart idea to conduct this whole process of budget planning as if you're running a business.

Create a Computer-Based Plan

The next step of creating your budget plan is to put it down in a computer-based format. Purchase a budgeting software program that you can use to record and keep track of your plan. Use the trial version of each software option for a while first to see which one fits your needs, because it's important that the program is easy for you to navigate and update regularly. If possible, choose one that allows you to set reminders to notify you of tasks you need to complete (like making a deposit into savings) or milestones you've reached (like paying off a debt).

Use Cash Instead of Cards

Financial guru Dave Ramsey suggests an "envelope system" when budgeting. With this system, you carry and use cash instead of cards. Split your money up according to the various categories on your budget and place the cash into separate envelopes. For instance, you can set aside one envelope for groceries, another for clothing and another for entertainment. This will help you conserve and manage your money more responsibly instead of swiping cards without monitoring your limitations. As Ramsey says, "There's something psychological about spending cash that hurts more than swiping a piece of plastic."

Keep Track of Even Minute Transactions

Another part of keeping your house budget in order is keeping track of all your transactions — even the small ones. Keep a notepad with you to record every transaction you make in the early stages of implementing your new budgeting plan. This will help you monitor where and how you're spending your money during an average day. You can then make cuts and lifestyle changes to correct bad spending habits. For instance, spending $50 a week on eating lunch out may prompt you to start making sandwiches instead to save money.

About the Author

Louise Balle has been writing Web articles since 2004, covering everything from business promotion to topics on beauty. Her work can be found on various websites. She has a small-business background and experience as a layout and graphics designer for Web and book projects.