How to Organize a Home Budget

Organizing a home budget saves you money in the long run.
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Setting up your home budget may seem overwhelming, especially if this is your first attempt at doing so. The key to putting together your budget successfully is to get organized and stay that way. To achieve this, you must take certain steps before beginning to construct your budget.

Step 1

Gather all documents that pertain to your income and any expenses that you have. You should always keep this information in one place, preferably in a filing cabinet or safe. If you don't have your information filed, get this in order and construct tabs that categorize each item by month or type of expense. This makes it easier to refer back to when you need to confirm something and also eliminates the stress that is caused when you cannot locate a document.

Step 2

List all income in one column and all expenses in another column. Create a spreadsheet, either on paper or on your computer, to keep track of your income and expenses. When you list your income, write down the amount of money that you actually take home, or your net income. If you write down your gross income, which is the amount that you make before taxes and other items are deducted, you might be surprised when you realize that you really have less than you need.

Step 3

Separate your fixed expenses from your variable expenses. Verify each item on your list and either highlight or write next to them whether the item is variable or fixed. The fixed items are those that you can pretty much count on to stay the same every month. These are usually the items that you need, such as mortgage or rent, car payments, phone bills and the like. The variable items include groceries, entertainment, insurance and property tax; these are the items that can be adjusted, eliminated or don't occur every month.

Step 4

Calculate the difference of your income to your expenses and make adjustments if necessary. If you're spending more money that you make, it 's time to make some adjustments and start eliminating items and activities that aren't necessities. Sometimes late fees and penalties are also overlooked. If you look at bills and you see that you are paying late fees, re-prioritize the order you pay your bills and eliminate these unnecessary fees.

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