Household Spending Budgets

Following a budget may seem like something you only do when you are low on cash or a Type A personality, but everyone can benefit from following a budget. Take the time to set one up for your new family and you can set yourself up for a secure financial future.

Why Budget

Budgeting gives you a bird's eye view of where you are spending your money. When you buy whatever you want, whenever you want it, you don't realize how much money you waste on little things. A budget will show you that you spend 20 percent of your income on housing and 10 percent on clothing. If you need to get out of debt or want to save for retirement or a big purchase like a home, your budget will show you the areas where you can cut back.

Getting on the Same Page

You'll have to work together if you want to create a budget. Remember that you aren't just an individual who can do whatever you want -- you are part of a couple and you need to present a united front when it comes to the finances. This means you both have to stay accountable for purchases and tighten the belt when necessary. Keep yourselves happy by giving yourselves each a weekly allowance, which you can spend on anything that you want guilt-free.

Getting Started

Save your receipts for a month and divide your payments into different categories, like housing, utilities, clothing, food, entertainment, debt payments, car or transportation, gifts and personal spending. Compare that with what you earn. Hopefully, you're currently spending less than you earn. Once you do that, try to plan to spend certain amounts in each category. If you need to cut back, try cutting back a little at a time. Each household will have different percentages for each category, but in general, you should only spend around 25 to 30 percent of your income on housing -- either rent or a mortgage payment. Utilities and transportation might eat up another large chuck -- around 10 percent each -- because they are necessities. You need to eat, but the less money you spend on food, the more you'll be able to put towards debt. Adjust your category percentages to be in line with your goals.

Budgeting Styles

The key to sticking with a budget is to find a method that works for you. You might want to track everything in a spreadsheet. Alternatively, you could simply pay for everything with cash, by putting the proper amount for each category into an envelope. Some people do well by paying all of the bills at the beginning of the month and then using the leftover money for savings or personal purchases.

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