If you feel like you’re working as hard as you can and you still aren’t saving money, it’s likely that a household budget will help. Household budgets force you to take a hard look at how much you’re bringing in each month and how much you’re spending. You can use a variety of means to create a household budget, such as budgeting software, spreadsheet software or just a reliable pen and piece of paper. In other words, there are no obstacles to creating a household budget. The obstacles are sticking with it and being able to accept the fact of your own financial limitations when it comes to expenditures. Following are the steps to take to create a household budget, as well as tips for budgeting money.

Determine How Much You’d Like to Save Each Month

The point of budgeting is to save money and control expenditures. So the first step for successful budgeting is to determine how much money you’d like to put by each month. Start with a modest figure. You can always increase it after your budget is finished if you have extra money left over. But it will be hard to trim your budget if your savings figure ends up being overly ambitious.

Add Up Your Income

Add up all the money you’re taking in each month. This part will be easier, since you only have to refer to your bank statements or pay stubs. The trick here is to use your net income, not your gross. For household budgeting, you want to only consider the actual money that you have to spend, not the portion that goes to taxes and/or a retirement account.

Itemize Your Expenses

Write down or enter all your monthly, set expenses. This will include:

• Insurance
• Credit card bills
• Utility bills
• Vehicle payments
• Mortgage/rent payments

Next, list your recurring bills that fluctuate. This includes things like:

• Gasoline
• Groceries
• Medical/prescription
• Clothing
• Entertainment
• Subscriptions

A simple way to do this estimate is to look at the last three months of these expenditures and take an average. This will give you a pretty good idea of what you spend on these items each month. Now, tally up everything, and that basically gives you the amount you spend each month to live.

Allocate Your Income

Next, allocate the correct amount of your income to each category of expenditures. This will be according to how much you spend in each category, such as gasoline, rent, etc. If the figures you came up with for each category are an odd number, round up. It’s better to overestimate expenses than to underestimate them. Add a total line to the bottom so you have an idea of the total amount you spend each month.

Add a Miscellaneous Category

It’s important to add a miscellaneous category to your budget. Nearly every month, unexpected expenses arise that you need to be prepared for. Allocating for this ahead of time will help you stay within your budget constraints.

The difference between your net income and your budgeted expenses can go into your savings account. See how this final calculation compares with how much you want to save each month. You may be able to save more than you thought. If you’re shocked at how little you can put into savings, consider the following ideas for managing money in your household.

Tips For Managing a Household Budget

Each month, you should adhere to your household budget as much as you can. Here are some tips to save even more.

Save on Groceries

Food prices continue to rise and consumers have to be even more savvy in order to get by. Ideas for making your grocery allocation go further include:

Buy in bulk and freeze smaller portions. Bulk food prices are always less per pound. Invest in good freezer paper and buy the largest packages you can buy. At home, split into individual portions and freeze.

Skip the coupons and buy store brands. Store coupons are good, but it’s usually cheaper to just buy store brands. Often, brand name ingredients are simply relabeled as store brands, but it’s the same product on the inside.

Skip processed foods. Processed foods are more expensive than making things at home. Learn how to mix spices from your pantry to make your own poultry seasonings. If you “can’t” cook, buy yourself the most basic cookbook and just follow the instructions. You’ll save a lot of money just by cooking meals from scratch.

Save on Clothing

It’s cheaper to take good care of the clothing you already have than to buy new clothes each month. Ideas for this include:

• Avoid spills on clothing by eating at table for all meals
• Treat stains immediately so they don’t “set”
• Repair clothing instead of getting rid of it.
• Hang up clothes instead of tossing over chair
• Designate “work” clothing and only wear these pieces at work.

Save on Home Entertainment

The cost of home entertainment has gone up over the years. But there are ways to minimize the costs. Consider these ideas:
Cut the cable cord and stream instead. Cable is almost unnecessary now. You can stream free movies and shows with a smart TV, as long as you don’t mind a few commercials.
Consider Amazon Prime. With Prime, you get some free music streaming as well as some quality shows and movies with a smart TV. Even though the cost of Prime has recently increased, the extra cost can be saved by reducing the cost of cable services. Not to mention that you get free online shipping and access to some of the lowest prices available.

Creating a household budget offers a sense of well-being because you will have more control and knowledge over your money and where it goes. For more help with controlling your money and taxes, book an appointment with a CPA. Your CPA has extensive experience with helping people to ensure that they stay within their budget.