Making a household budget, whether you’re a couple or a family with children, always seems like a good idea but once you get started, it might not work the way you envisioned it. Budgets can be tricky to make because we tend to have unrealistic goals or expectations that aren’t in line with how we really spend money. This makes them hard to stick to, which can be discouraging. You may find that you’re ready to quit your budget before you even really get started.
So what’s the solution?
It’s important to make a budget that’s realistic, attainable, and in line with your lifestyle. It’s also good to create a financial plan that isn’t going to be super time-consuming or leave you struggling to keep up with the demands you’ve placed on yourself.
Below are some tips you can use to create a real-world household budget.
Track Your Spending
Before you start the process of outlining a budget, track your spending for a few weeks, or better yet a few months. You can use an app on your smartphone, or simply write it down. When you see where you’re spending money, it gives you a better foundation to create your budget, and it can also open your eyes to places you could cut back, which you might not otherwise even notice. This is one of the biggest areas many people fail at when they start working on a household budget because they start with no baseline.
Don’t Cut Out all Luxuries
Just because you’re on a budget, doesn’t mean your life has to be devoid of some splurges. Realistically account for these items in your budget by giving yourself a bit of money each month that can go toward eating out, or buying a new outfit. This way, you won’t be so easily derailed and disappointed in yourself if you can’t stick to an austere and unrealistic budget. If you want to be a bit smarter with how you splurge, think about searching for deals and coupons for dining, coffee, clothes or whatever else it is that you don’t want to give up.
Know How Much You Have Coming In
Along with taking a hard look at where your money is going, also important when you’re developing a household budget is to see how much money you really have coming in. You may be over or underestimating this amount, and it’s important you have a clear view of this before you can start allocating what goes where.
Find a Method That Works For You
There are a lot of different ways you can budget for your household. You can stick with the old paper and pen version, or maybe you want to use budgeting software that has all the bells and whistles and does a lot of the work for you. Many people will opt to use a budgeting app that they can take on-the-go, so they always have a complete view of their budget and finances. Perhaps you want a budgeting app that features a certain style of budgeting, like the envelope method. It may take some time to find what works for you, but once you do, it’ll be much easier to stick to.
Setting up a household budget isn’t easy, but for most people and families, it’s certainly worth it. Rather than striving to cut out all unnecessary spending, instead try to focus on creating a personalized budget that works for your life and the life of your family, and will be easy for you to maintain on a daily basis.