A budget makes you aware of your spending, savings and income. Making up a budget can be a bit trickier when two or more people are involved, since you have to be honest with each other about your spending habits, meaning you'll have to admit to all the insignificant items you blow your money on each week. However, setting up a budget with your partner will help you reach your financial goals more quickly.
People can become overwhelmed when it comes to dividing their expenses into different categories. Aim for simplicity and lump several categories into one. For instance, if you and your partner have student loans, set up a debt category and include both student loans as well as credit card debt and personal loans. A "Housing" category should include your mortgage, rent, rental or homeowner's insurance and property taxes. You may want to slide utilities into "Housing" if you really want to minimize your categories. Other common family budget categories include transportation, groceries, savings, entertainment and personal.
If you are paid once a month, figuring out your monthly income should be simple, as all you need to do is look at the amount on the check. Figuring your income gets a bit trickier the more jobs you have or the less regular your paychecks are. You may want to look at your previous year's total income and divide that by 12 to give you a general idea. If you find you take in more that you thought, you can always adjust your budget.
Keeping Track of Expenses
You can't make a budget without knowing what's going out. Give your partner and yourself a small notepad to carry around and record everything you spend money on for a month or so. At the end of the month, total your spending and your partner's spending and add in any other expenses, such as your mortgage, car payments and student loan payments. The total amount should give you a clear idea of what you both spend each month. If your expenses are greater than your income, you'll have to find places to make adjustments and cuts. If you have extra income after your expenses, put it towards savings or another financial goal.
Recording Your Budget
How you record your budget depends on your preferences. You may want to make a large chart and hang that in your study or kitchen, so that you can clearly see your budget and whether you're staying on track or not. You can also use a notebook to keep track of expenses or a spreadsheet. You can built your own template in a spreadsheet program or download one. A computerized budget takes the pain out of doing math, since most spreadsheets or budget programs will total everything for you.
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