Posts Tagged ‘making household budget for moms’

Making Household Budget For Moms

When it comes to making household budget for moms, it is a two-step process. First, you need to find out what you are spending at present, and second, you need to put together your budget. Having a household budget is very important to get out of debt, to start a savings account, and to hold better control on your finances. How to build a budget and how to implement the same effectively to ensure great results is one of the best things to learn for a mom. Following is a brief rundown on how to go about it.

Do A Thorough Analysis On What You Spend

When it is about making household budget for moms, the first part of the process is to do a thorough analysis of what you spend. Following are some important points to keep in mind in this regard.

- You must know how to differentiate between fixed (unchanging) and mutable (changing) expenses. For example, entertainment and grocery expenses can be put into the mutable expenses category. On the other hand, mortgage payments, rent, car payments and other such things must be put into the fixed expenses category.

- Create appropriate categories and sub-categories for different types of expenses that may include entertainment, household items, cable TV, utilities, groceries, dining out, automotive, insurance, mortgage, rent, and others.

- If you have multiple sources of regular and irregular income, you must create appropriate categories and subcategories for them as well.

- Once you write down all your incomes and expenses in different categories, sort them out thoroughly.

- In order to get a better picture about your current financial and debt situation, you must also study the bank statements, loan statements, credit statements, and other such documents for at least the last three months.

- When you are done, you will be able to have a practical idea on where actually you stand.

Create A Budget

This is the second part of the process for household budget for moms, where you have to work on your strategies to come up with an efficient budget plan. You have to learn to live within your means, and whatever your budgeting plan is, it must effectively reflect the same.

- The first thing you have to do is to calculate the total monthly income from different sources. Unless you know how much money you have to work with, you cannot make a good budgeting plan.

- Deduct the total amount of fixed expenses (such as credit card bill minimums, car payments, cable bill, mortgage payments, and others) from the total income.

- Transfer a specific portion of your income (at least 10-15%) goes to an emergency savings fund. You must also take away the regular allowances for your children.

- Now, you can see how money you have left and what the other expenses are that you have to meet. Make cuts wherever you find it appropriate. The more your reduce your expenses, the higher amount of money you can save, but it does not mean that you should completely eliminate your entertain expenses. Entertainment is a part of life and you must dedicate at least 5-10% of your total monthly income toward the same. If you don’t do that, you will soon find yourself demodulated and all your budget plans will eventually fail.

- Even after paying for all expenses, you are still left with some money in your account. Put it in a long-term saving account.

Overall, if you follow the above two-step process, making household budget for moms should not turn out to be a very difficult task.

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