How to Set Up a Simple Home Budget
When it comes to making a home budget you don’t have to freak out. There is nothing complex about it. If you are anything like me and can’t face an excel spreadsheet or a QuickBooks-like thing then you can go back to the old days and *gasp* write it down!
To start out you will need to gather your records. Bills, pay stubs, bank balances, whatever you need to find out exactly how much money you bring in and how much money goes out. Write down all your bills including reoccurring charges like Netflix subscriptions. Then total what you make a month. Maybe you get paid every week, every two weeks or whatever. Make sure you make a note of when you get paid and how much.
Okay, now to the bills. Note an average balance for each of the bills as not all bills remain the same. Like my electric bill goes up and down depending on the season and so on. Next to the average amount note the due date and how you pay it. If you mail it then you need to send it at least ten days before the due date to be safe. Online means you can pay last minute. However you should make a note of any extra charges incurred by your form of payment. For example if I want to pay my car note online they charge me $12! So I switched to mailing it in and it is well worth the price of a stamp.
Once you have a list of all bills and their due dates and your income then you can get down to business. Set up a sheet with columns. In each column put the total amount you make for that time period at the top. In my case I get paid twice a month on the first and the fifteenth. So I split a sheet in half. On the half for the first part of the month I listed every bill that was due before the fifteenth. On the half for the second part of the month went the bills that were due after the fifteenth. I added the total amount of the bills for each time period and discovered it wasn’t exactly equal. The bills due after the fifteenth were much higher than those due before. So I shifted some of the bills over to make it more equal.
After I got the bills equalized I then moved on to other necessities. Things like food and gas money, savings, donations, and even fun! I started out with savings and donations. Tithing is a big part of my life so that ten percent of my income was taken out first. Then an additional ten percent went into savings. With what was left I estimated my needs for food and gas. Then if there was anything left I decided to set it aside to save up for fun things like a new laptop or phone.
By the time I was done I had decided I needed to cut costs somewhere so I looked over my bills. There were quite a few ways I could cut down. My car insurance could be reduced by raising my deductible. My cable bill could go down by losing a few channels, or cutting it altogether in favor of the internet. My phone bill and electricity bill could go down if I was more aware of my usage. There are always ways to cut down if you can see the big picture.
Thankfully this system, though basic, has worked well for me. It is easy for me to get a quick overview of my finances if an emergency should arise. A simple budget can help you stay on top of your money and live a happier, more thrifty life.
This article is contributed by Madoline Hatter. Madoline is a freelance writer and blog junkie from ChangeOfAddressForm.com. You can reach her at: m.hatter12 @ gmail. com.
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Category: Budget
