Creating a Household Budget

Make a list of your monthly expenses from bank statements.

Make a list of your monthly expenses from bank statements.

Creating a household budget requires a little patience and planning. You and your significant other will need to compromise now that you’ve tied the knot. The key to creating a budget is limiting certain extraneous expenses. For example, money you spend at the horse track, local bar or beauty salon will probably need to be cut. Instead, you’ll need to make sure you first cover your basic living expenses. Work together in creating your budget. Discuss the areas where you can cut back. Use budget software applications like Quicken or Moneystrands (see Resources), which can help you analyze your expenditures.

Calculate your monthly net income by adding your pay stubs together. Add any additional income that you make each month.

Write down your monthly expenditures on a notepad, using bills and transactions from bank and credit card statements. List expenses such as your mortgage or rent, car payments, car insurance, student loans, cell phone, electricity and water bill. Make sure you also include entertainment, gas, haircuts, car repairs and cash withdrawals. Add up all monthly bills and write down the total.

Subtract you total monthly bills from your net pay to calculate your disposable income, the amount you have left over. Write down the amount that you want to save each month. Use $500 as your savings goal, for example, if you want to have that amount left over each month. Subtract the amount you have left over each month from $500 to calculate how much extra money you need.

Evaluate your monthly bills using the family budget calculator at Plug your income and expense totals into the empty boxes. See how your expenditures compare against the average household, as compiled by the Bureau of Labor Statistics. Highlight the expenditures that exceed those of the national average.

Circle your expenses that vary each month, such as groceries, clothing expenses, electricity, entertainment and gasoline. Place a check mark by the variable expenses that exceed the national average, as compiled by the Bureau of Labor Statistics.

Discuss how much you two can cut from your relatively high variable expenses. Cut $100 a month from your entertainment expenses, for example, if you exceed the national average. Continue to list variable expenses and amounts that need cutting, until you reach your monthly savings goal.

Create a new household budget that reflects your target expenditures for each month.

Items you will need

  • Pay stubs
  • Monthly bills
  • Bank statements
  • Credit card statements


  • Stick to your monthly budget. Cut back on one type of expense if you exceed your monthly expenditures budget. For example, cut your entertainment expenses by $25 dollars if your electric bill is $25 over budget in January. Think of ways you can cut your variable expenses even more. Turn your heater thermostat down to 68 degrees, for example, when you go to work. A lower temperature setting can help you save on natural gas expenses during the winter.

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