Setting a Household Budget [Budget guide and tips]


Personal  or Family

I will be discussing in this post 2 budgeting templates. “Templates” is the operative word. Adjust them as needed, but be conscious of purchases and the excess. If you NEED a budget, write down the expenses you CANNOT forgo and keep note of what is a want or need. If the budget is just something you want to help you allocate spending and make things more efficient, then identifying wants and needs can be just as beneficial.

Budget 1

I try to keep household expenses to about 85% of our income. This helps to have money to put away for emergencies or a bit of extra spending. Each percentage is the max amount I have noted in the past that we can devote to each portion. The ranges are estimates that help denote variance.

  • Mortgage/Rent/Home Insurance/Taxes: 30% – 40% –  Keeping this portion on your budget on the lower end is more efficient and helps to make saving easier.
    • When looking for a place to call home whether buying or renting:
      • Have a list of needs and wants.
      • Figure out priorities.
      • What are your deal breakers?
      • What is your tentative full budget looking like?
      • What is your budget for housing? Include that you may need insurance or pay taxes. This is why keeping to the lower or middle range of your housing budget is helpful.
  • Bills:35% – 41% – In my bills  for ease I include the following:
    • Utilities, college payments, necessary subscriptions = 21%
    • Food: Grocery, junk food, take out = 6% – 12%
    • Transportation= 8% – This includes gas, maintenance and insurance.
  • Household equipment/ Furniture: 9%  ( I would use this section to handle replacement and repair needs. This is especially important with children and pets. This can also be set back as an emergency fund for home repairs if not used.
  • Household operations and supplies(House cleaning/ Childcare/ etc): 10%

 

Budget 2

For many of us Budget 1 is not realistic or feasible. Sometimes it’s hard to say that our monthly expenses will not exceed a certain percentage. We experienced this and so I developed a different way budgeting that we’ve decided to use for the last few year. We still try to keep our expenses at about half of our mutual income.

After all of our bills have been paid or we have determined how much our monthly expenses cost and have noted that we determine how much is left over. We then allocate everything left over by  into one of the following categories:

  • Save 25% – Can be further divided into Emergency ( This is used for us as the sinking or unforeseen bills fund. Its untouchable except for emergencies.), long term or short term.Short term can be larger expenses you are saving for or money to pay down debt that you want to collect and keep separate till you make the payment.
  • Spend 40% –  Can be divided into personal spending, entertainment, or date night
  • Car 30% – We set money aside for car maintenance and car emergencies.  At the beginning of the next month whatever of the car fund that is not used, we take out money for things like general maintenance that is not monthly, them dump the rest into the savings fund where it’s needed the most.
  • Vacation 5% – Whether it’s visiting family or taking a road trip, it’s good to allocate money for that fun. IF you know your family won’t be taking a vacation, allocate it as needed.

Savings and spending are the 2 that we switch on a month to month basis, depending on the needs. If we need more household supplies I will switch them. Always try to make sure that you trim the excess spending, especially if you are budgeting out of NEED. Identify expenses based on wants and needs.

Ways to record your budget:Budget 2 breakdown

  • Paper
    • Pencil and paper in a binder or pad
    • Ledger
  • Electronic
    • Budgeting software
    • Online spreadsheet

 

 

 

Helpful links to make your own budget:

2 thoughts on “Setting a Household Budget [Budget guide and tips]

  1. Pingback: Daily life organization for College | Design & Scheme

  2. Pingback: Easy Steps Start Organizing your Budget | design & scheme

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