Your household budget provides a strong financial foundation for you and your family. With a budget on hand, you are able to efficiently manage your money, save, control your spending, pay, and stay out of all sorts of debts. But to do so, you need to have an accurate picture of the things that are going in and out of your account. Furthermore, you will overspend very easily without a budget and you will end up relying on credit cards and loans to pay your monthly bills. If you are already following a budget, it is time to make some good changes to it.
Print Out A Budget Worksheet
There is already a lot of financial software nowadays especially those from IRESS that offers great help for the proper handling of your finances. You must create a worksheet to help you organize your budget.
List Down Your Income
This time, you have to determine the amount that you are bringing into your bank account every month. You can add up all your sources of income such as child support, wages, alimony and so much more. But if you are getting money from a job that doesn’t pay on a regular basis, it is best if you just leave it out of your budget list. Remember that a budget needs to be a reliable document that you can easily depend on.
Compute Your Expenses
There are expenses that you pay every month that is fixed such as rent, child support, electricity, groceries, property taxes, water bill and more. List down all of these expenses and their amount.
For those without fixed costs, you can list the maximum payable amount that you tend to spend in this category or the amount that you expect to see on your bill. If you are still unsure, you can check your previous spending by checking your past credit card and bank statements. Once you review this spending, you will also get to understand where you overspend.
Calculating The Net Worth
A net income is an amount that was left after extracting the monthly bills. To calculate your net worth, you need to subtract the expenses from the monthly income.
Adjusting The Expenses
If you found out that your total net income is negative, then this means that you have more spending than your income. This is very wrong especially if you have a household to support. Otherwise, you will turn to use your credit card to remedy your negative net income.
Tracking The Spending
Now that you are aware of your negative net income, it is time to correct it by tracking your spending every month. In this case, the financial software from IRESS is very helpful and reliable. If you often go over your budget, then you should help to find out where you overspent and where your money is going so that in the future, you will be extra careful not to overspend. You can also adjust your budget so your income can still cover your monthly payments.