How to Start a Household Budget

Are you one of those people who looks at your bank account a week after payday and thinks “Where did my paycheck go?” Would you like to to cut your spending? Do you want to save money for a vacation or big purchase? The easiest way to make more sense of your financial situation is with a very thorough budget.

When my husband and I got out of college, we moved to Chicago while I was working as a freelance stage manager and he was working on getting his EMT certification. This meant that we had to pay big city rent with drive-thru paychecks. Did I mention that we were also planning a wedding?? I created an Excel spreadsheet to track every penny that we spent, and we managed to get by. As our financial situation changed, so did my spreadsheet. I still track our spending very meticulously to make sure that we can afford to live the lifestyle that we want to live on the income that we have.

Think you are ready to give budgeting a try?
Click here to download a template of the budget spreadsheet that I use.
You can change it to meet your needs, but I’ve edited it to be a pretty good starting point.

Here are some important tips as you get started.

  1. Set realistic spending goals

    Start your month by adding values in for your “projected” income and expenses. Make sure to be realistic about what you expect to spend. This will get easier down the road as you learn what you actually spend on things. For your first month, just take guesses.

  2. Choose your priorities

    No matter how broke we were, my husband and I have always had something allocated in our budget for dining out. Going out for lunch or dinner is our prefered social activity, so we decided that it was an important thing to spend a little bit of money on. For a long time we didn’t prioritize having cable, so we kept that out of our budget.
    Whatever it is for you, make those choices. If you want to spend a little more money in one category, then try to cut your budget somewhere else to make up for it.

  3. Don’t forget your automated payments

    So many things just come out of our bank accounts now – rent/mortgage, student loans, car payments, etc. Don’t forget to count these things in your budget or your numbers will be way off!

  4. Make goals to pay off debt

    Once you figure out how much money you need to spend to get by every month, figure out how much money you can afford to put towards paying off your debts. This mostly applies to things like credit card debt that don’t have repayment plans, but if you can afford to make more than just your monthly payments on loans, even better!

  5. Think forward to tax time

    Keep track of anything that you can use as a tax write off now – job expenses, charitable donations, childcare, whatever your situation calls for. When tax season comes you will be happy to just look back through your budget and find your deductions.

  6. Have a system for entering things into your budget

    I think that my system is pretty simple – when I spend money I keep the receipt or a post-it note with the amount spent in my wallet until I get home. When I get home I put the receipt in a clip on the fridge, and then once per week I enter all of our spending into my budget spreadsheet. Find whatever system works for you. Just make sure that you have a good way to keep track of your spending.

I hope that I have explained this process well enough that you can try budgeting. Honestly, I have been so careful about my budgeting for so long now that it has just become second nature.

If you have any questions, just comment below or send me an email from my about me page!

 

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13 thoughts on “How to Start a Household Budget

  1. Thanks for reading! I actually have a tab in my budget now called “reminders” that is just a monthly list of things like weddings, birthdays, when our car insurance is due, quarterly water bills, etc. That way I don’t forget to factor those things in.

  2. Yes! We’ve really been stringent this year with our budgeting and it’s hard sometimes. I usually forget about that random auto payment that comes out near the end of our paycheck. My friend was telling me about her Costco card and how you get cash back. She buys with it then immediately pays it off and gets a check back with her points! Something else to look into when saving money!

  3. Thanks Lexie ! I need to create a blog budget and business budget, so I’m not overspending. I love craft supplies and they add up fast, so needing to be more mindful, your budget tips will help a lot with that!

    • All of those little expenses really do add up to more than we realize! Thats why tracking your spending is important.
      Thanks for reading!

  4. This is so helpful! I am so bad at keeping track of all those automated payments, as well as the random receipts from extra or little purchases. I hope to get my family’s budget in order once I go back to work. Thanks for this post!

    • It takes some time and diligence to be thorough with a budget, but it’s very important! Thanks for reading.

  5. This is a great post and good information for all of us. We often forget to account for the little things in our budget and those can sabotage you if you aren’t careful. Paying off your debt is huge too, it makes life so much easier. We pledged years ago to stop using credit cards and go with the thought process that we have to have to money to buy it or we don’t need it and if we do feel we need it then we have to save for it. Thank you for sharing this post in the All For Mamas Link Party Week 3 #allformamas. I will be sharing this on the facebook group page, my page, twitter and pinterest

    • I still use my credit card because I love the cash back. 🙂 I won’t ever leave a balance on it though.
      Thanks for reading and for sharing!

  6. Great tips, another way to set realistic spending goals is to categorize your spending. So you can know how you are spending on fuel, food utilities. Then challenge yourself a bit to see how far you can bring those numbers down with value shopping and comparison price check for services I can swap or change out. Thanks for sharing this with us at the Dishing It & Digging It Link Party. Have a great day!

    • That is a great tip! Having a budget spreadsheet with really help with categorizing spending.
      Thanks for reading Christine.

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