Top Tips for Managing and Controlling a Household Budget


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A household budget helps to keep family finances in order during the year. A budget helps when planning large purchases, paying down debts and saving money. Budgets do need to be managed and controlled especially if things in the home change. Several tips will help anyone to manage and control a household budget.

Include Money for Impulse Purchases

Impulse purchases can quickly ruin a budget. This is unplanned spending on items like lunches, office parties or entertainment. A household budget should include a specific amount every week that can be spent on impulse purchases. The money does not need to be spent each week. Keeping a specific amount of cash on hand for impulse purchases can help to keep the entire family within the budget.

Considering Switching or Downgrading Services

Households that are having difficulty balancing a budget every month will want to consider switching or downgrading the services in the house. This includes everything from cable packages to cell phone plans. Families should take time to compare different plans for each service. A large amount of money can be saved each month by downgrading a plan so there are less cable channels or fewer cell phone minutes. Cancelling something like housekeeping or lawn services can provide added savings in exchange for a little extra work.

Include Seasonal or Annual Charges

An inaccurate budget can make it hard to keep up with bills and other debts. Many household budgets do not include annual or seasonal charges. These are items like annual credit card fees, home winterization costs and car inspections. It is important to include as many seasonal or annual fees in the budget as possible. This will allow the family to get a better picture of the finances each month. It also prevents surprises that unexpectedly lower the money available in the household.

Use Automatic Transfers for Savings

Some households have to manually transfer savings into a different account after each paycheck. This can start to cause problems if money is tight or if finances become complex. One way to make certain that the amount budgeted for savings is placed in the proper account and not spent is to use automatic transfers. Automatic transfers will move a percentage or set dollar amount directly into a savings account after a deposit. This makes saving much easier.

Create an Emergency Fund

Managing an effective budget means planning for long-term financial stability. Car repairs, medical bills or emergency home maintenance are all expenses that can occur suddenly. They can also drain savings and ruin a carefully planned budget. Avoiding this means creating an emergency fund. An emergency fund is a small amount of savings separate from all other accounts. A small amount is saved each month until a certain total is reached. The fund can cover emergency expenses, protect savings and prevent the household from falling into debt.

Use Budgeting Software

Managing a household budget means staying as organized as possible. Using a notebook or ledger for a budget can lead to mistakes when adding figures. Families should use some type of budgeting software. Budgeting software makes entering receipts, creating budget categories and changing numbers very easy. Most software can also show graphs or charts that put monthly spending into perspective.

Review and Revise the Budget Regularly

A household budget is not static. The amounts allocated for different expenses need to be reviewed and revised regularly. Changes in personal habits, employment or the preferences of the family need to be adjusted in the budget. This could mean increasing the amount for groceries and reducing the amount for gas during the week. Modifying the budget to reflect how the household is changing will keep the figures accurate.

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