How To Set Up A Household Budget
If you want to keep track of your household's finances, you need to learn how to set up a household budget. Setting up a budget requires you to record your income and how you've spent your money. You'll be better able to prepare for the future once you have set up a budget.
- Note your income. You need to calculate how much income you have each month when you set up a household budget. Include the money members of your household earn in wages, but don't forget interest income and rental income.
- Add up your expenditures. Living expenses fall under expenditures, as do purchases you've made for fun.
- Figure out how much you pay in taxes. You have to pay attention to taxes when you set up a household budget. Make sure you're accounting for federal, state, and local taxes. Some taxes may be automatically withheld from your paycheck. If you're self-employed, this part of setting up your household budget will be a little trickier because you'll need to calculate all taxes yourself.
- Record your debt. Note how much you owe on your mortgage, credit cards, and any loans you've taken out.
- Use the information you've gathered to create a plan. The point of setting up a household budget is to make better financial decisions. Read through your budget carefully. Do you have enough income to support your expenditures, comply with taxes, and pay off your debt? If not, look for ways to cut back in spending or generate more income.
After you've set up your household budget, update it frequently so you can continue to use it.