Basic Household Budgeting For Beginners

I don't know about you, but Fall seems to be the time of year my family spends the most money. September brings the all important birthday, October means Halloween, November means Thanksgiving, and of course, December is jam packed. Add in getting prepared for winter, restocking the pantry to deal with the possibility of bad weather, and sometimes smaller paychecks from my DH - if I don't budget, I'm in big, big trouble.

The word budget makes many people cringe. To them, it means no eating out, counting every penny - or even paying with cash only. Budgeting doesn't have to be stringent, but if you don't pay attention to where you money is going, you'd probably be shocked at the amount of waste. It's not just that your afternoon caffeine adds up - it's everything adding up, from that quick carry out deli meal on the way home, to spending more than you planned to at Target (guilty here!) - or even using more electricity one month.

To create a monthly budget, you'll need to start out figuring out exactly how much money your family earns. If you are salaried, this is probably quick and easy. For those who are paid hourly though, this can be a little more tricky. (it can be even more entertaining if you are paid for shift differentials and the hours you work are varied to begin with - we have that here with my husband's paycheck.) The simplest way to deal with variation in hours is to use the lowest amount of hours you usually receive, and divvy up any remainder to your paycheck between any debt you may carry and any holes in your budget or emergency expenses you may have.

After you've figured out how much money you have, you'll need to take a look at what bills you have monthly. If there are bills you pay quarterly or something like that, divide it by 12, and work it out that way, or you may forget to include them. Remember, simple is best! You'll be including everything from your rent or mortgage, to insurances, to garbage (if you pay it) and electricity, to any memberships and even toll fees.

Next up, is the other items you buy that are more flexible. This is your groceries, gas, and entertainment expenses - and yes, your afternoon caffeine. ;) Whatever is left after subtracting your must pay bills from what you make, is what you've got to divvy up here. If you're pulling up a negative number, you're going to have to cut expenses. An easy way to do it is to check with insurance companies, cable companies, cell phone providers, etc and see if you have the best plan available for your needs. It might be a little time consuming for an afternoon, but you could walk away from it with a much better deal - and perhaps even a better package - than you had before. Why throw away that money, even if you have extra? Wouldn't you want to spend it on something better - perhaps even saving for a vacation, or that new TV?

If you're really in the hole still, then you'll have to decide what is "fluff" and what isn't. That is something to work out as a family. I always suggest not hiding any budgeting problems from kids, because it teaches them to be budget savvy themselves. Give your kids a voice in the matter if you can - if you have a choice when it comes to either having a pizza night, or going to the movies/getting a new game, let them help decide.

Sometimes the easiest way to stick to your new budget when it comes to groceries and entertainment, etc, is to use cash to pay for it. I hate to call it an allowance, but I suppose that's what it is. If you are using cash, you tend to think twice about buying things, especially at the grocery store - where it is all too easy to let things end up in your cart that maybe you hadn't planned on buying.

If you're ahead after your calculations, well, then congratulations - I think you're doing better than half the country right now! ;) Be careful with what you are spending, and always remember that it is better to focus on paying down your debt such as credit cards first. If you are debt free, remember to squirrel away money towards emergency funds and retirement. It's always better to be safe, than sorry.