Sticking to a budget can be challenging for one person. Now that there are two of you, it could be even harder. In fact, your household budget could be the culprit of your first fight. However, you and your significant other can avoid that by planning the ideal budget for your household. Home budgeting can be easy, but it takes a little work.
Set Your Goals
Have a goal in mind when you create your home budget. Decide how much money you want to save each month. For example, if you want to save $500 per month, make that the goal of your budget. However, sometimes you will need to lower or increase your monthly budget goals. For example, you may need to save more for that Caribbean vacation during the spring. Gifts for mom, dad, uncle Joe and aunt Harriet may set you back a little at Christmas time, too. Know your short- and- long-term goals. Purchasing a Thigh Master may be a short-term goal, while saving money for retirement or investment accounts would be a longer term goal.
Figuring Disposable Income
Disposable income is the money you have left over each month after bills. Disposable income for some may amount to few quarters that have fallen between the couch cushions. Whatever your situation, you will need to compare the money you earn with the money going out to figure your disposable income. Get out the latest pay stubs for both of you. Figure out how much you both make per month. Take out all of your checkbooks and credit card statements. Make a list of your monthly expenses. Separate your expenses into both fixed and variable expenses, according to Kiplinger.com. Fixed expenses, which stay the same each month, include your mortgage or car payment. Variable expenses include electric and water bills, clothing allowances and transportation expenses. Add up just the typical expenses for an average month. Subtract those expenses from your income to figure your disposable income.
If your disposable income falls well short of your savings goals, you will need to find ways to cut back. You will not likely be able to cut back on fixed expenses like car payments, until they are paid off. Therefore, target variable expenses. Cut back on entertainment expenses like movies and dining out. Try car pooling to cut back on gasoline expenses. Determine how much extra money you need per month to reach your savings goals. For example, if you need $200 more per month, buy fewer clothes. Start shopping at a wholesale grocery store to save on food costs. Study your variable expenses and decide together where you can cut back.
Creating Your Budget
Create a budget that reflects the maximum amount you can spend each month on various expenses. For example, if you cut your entertainment expenses from $300 to $150 per month, you will have to limit entertainment to $150. Keep a close eye on what you spend. Keep receipts of everything you spend and write it down in your checkbook. Stop using the credit card for a while and make only cash and check purchases. Put the money that you want to save each month in a savings account. For example, put $50 in a savings account each week if you want to save $200 monthly.