Many people make sincere attempts to set up a household budget and get themselves together financially, but these attempts fail too often.
Here are some steps how to be creative in your household budgeting
1. Check Your Incomes
This is starting point of every budgeting. When a couple first starts out, they often have two incomes and they set up their household budget based on that combined total. But that can be mistake. As soon as the first financial crisis hits and one of those incomes is reduced or even wiped out, everything can fall apart. Couples should make every effort to live on one income. Second income should be used for savings and extras.
If you feel you're not earning enough money for the work you do, you might consider asking for a raise or promotion, or, looking for a better job. If these options are not available, taking on a temporary second job might help as well.
2. Plan Budget First
You must have a clear vision and a plan how your budget will look like and what you can and cannot afford. This plan should be reality check for you and your household, i.e. how many you earn and how much you usually spend. First, you should key in all of your planned expenditures for the upcoming year. Sort the expenses for the upcoming year in descending order. Review the list and cut big unnecessary expenses first, and then wipe the ‘little’ ones.
3. Think About Your Savings
Although this could go at the end of this list, we’ll put it as a number 3 to show its importance. Many folks don’t think about savings, but every household should have a fund for an emergency. Recent financial crisis shows how it’s easy to lose everything you had in just few days. So, think about future and always make a ‘stash’. If not for yourselves, then for your children.
4. Don’t Spend More Money Than You Really Need To
This may be the biggest step you will take in keeping your finances under control. For a month, write down everything you spend money on, and keep doing it as often as needed: every month, once a quarter, weekly, etc. Within a year you'll take full control over your budget.
Don’t spend money on unnecessary things. Keep in mind to save money for what’s important to your household. If necessary, make a list, just as budget list and compare what is important and what’s not.
5. Get Out of Debt
Other than your mortgage, are you in debt now?
Don’t put too many purchases on credit. A few purchases can easily add up to hundreds or thousands to your debt. Check your credit purchases regularly, just as you would when using your checking account or cash.
6. Think Green
It’s all about environment nowadays. Try to use ‘green’ logic wherever it could be applied. Recycle when it’s possible: bottles, packages, etc. Also use things that can be used again.
Turn off the electricity when you don’t need it or always cook with cover on your pan to avoid high energy bills.
Don’t drive to your working place, use public transportation like buses or metro, or bike instead. In time of oil crisis, this will help your little budget a lot.
7. Shop Smart
If there is something on sale that you use a lot, stock up while its on sale. Try using coupons when you can, because many stores double them.
There are 3 types of shopping that can help you save your budget significantly: Clearance Shopping, Coupon Shopping and Thrift Shopping.
Don’t buy something you don’t need. If you go out just to buy a pair of shoes, don’t buy that dress that goes great with them. Wait until next month.
If you need to buy a present for Birthday in May, buy it during the Christmas sale. Shop online on internet auctions and seek for designer clothes for a fraction of the original cost in thrift stores. Shop during the week to avoid the crowds.
8. Be Rational With Food
One of the things that suck most of our budget during the shopping is food. Try to be rational. Someone said that you should go in food shopping only when your stomach is full. Buy only what you eat. If you eat out at restaurants a few times a week or more, try doing it less.
Also, pack a lunch more often, instead of using those vending machines at work.
9. Don’t Accumulate Too Many Monthly Bills
It may not seem like much, but $10 here, $15 there can add up another handful of monthly expenses. Just as keeping track of your monthly spending will benefit your budget, keeping your monthly bills in line will help significantly.
10. Calculate Everything
Don’t miss a single thing when you’re calculating and making your budget: gums, candy bars, popcorn in the cinema, etc. Every single expense is important. If you skip to calculate them all, it can mislead you in your final yearly budget report.
Finally, when reviewing your budget at the end of the year, you’ll have a clear picture what you have to do and how much successful you were in your budgeting.
If your monthly income covers the outgo, then things are fine, and if it doesn't, you have to cut back somewhere.