Creating a household budget may be one of your easier tasks as a couple, especially if there are still just two of you. The challenge comes later when you must plan your little rug rat's college education. For now, just plan to limit your social life. Eat out once per week instead of every night, for example, if you want to eliminate frivolous spending. Most importantly, work together on the expenses you cut, sharing any belt-tightening equally.
Identify all of your income sources. Calculate how much you and your partner earn each month by adding the net pay from your pay stubs together. Include any other monthly income either of you make, including money from a part-time business.
Get out copies of all billing statements, including your electric, phone and car payment bills. Take out your checkbook so you can see how much you are spending on average. Make a list of all of your bills. Add expenditures such as gasoline or clothing purchases, which should be listed in your bank or credit card statement. Make sure you include money you spend on car repairs or doctor visits. Add up how much you typically spend for car repairs or doctors each year, and then divide that figure by 12, for example. List the three movies you went to see that your partner didn't know about. Argue about it later.
Subtract your monthly bills from your monthly income. Decide how much you want to save each month, and then calculate how much you need to cut your expenses.
Enter your income and expense figures into your budget software. Study which expenditures are higher than the software recommends, then plan to cut back on those expenses, if possible. Cut your entertainment expenses, for example, if you spend more on entertainment than the budget software recommends.
Recalculate your monthly savings projections based on the additional expenses you cut out. Make sure you are allocating enough money for savings, retirement investments and other financial goals.
Establish your budget with the budget software and stick to it. Adjust your household budget if some of your expenses, like property taxes, increase. Cut money from your new clothing expenditures, for example, to make up the difference.
- Make sure you discuss your household budget regularly. Sacrifice your fair share of activities or expenses instead of expecting your partner to do all the sacrificing. Otherwise, your partner may harbor resentment.