One of the first steps in making a good household budget is to assess the expenditure at the present time. Now while is the easy for those who are already running a household, it is not that simple for those who are planning to run a house in the near future.
While it is true that those planning a household budget in advance will find it difficult to put the budget in order, this does not mean that the task is impossible. Some tips below will help to formulate a household budget in advance:
- Consider the number of family members – When planning a household budget in advance; begin by assessing the number of members in the family. Once you know the number of people in the house, it will be easier to assess their needs and thereby the consequent expenditure.
- Earning capacity - Once you have the number of household members in place, the next step is to segregate the earning ones from the non-earning ones. Assess the average combined income of the earning members. This will help you get to a number regarding the incomes of the house. It is from this income that you will need to put aside the sum for the household budget.
- Fixed expenditures - Now bring in the fixed expenditure. This will involve approximations on the size of the house, its lease, the electricity requirements, the number of cars, insurance covers for the members of the family and so on and so forth. These will be easy to assess since most of the times these numbers are fixed in nature and easy to come by.
- Flexible expenses - Now come in the real grey area. Calculating expenses related to food, clothing, cosmetics, toiletries, kitchen requirements, laundry, detergents, etc is not an easy task. As opposed to trying and putting down a figure on each of these items, it will help to figure out the collective cost of these flexible items. Ask a few others who run similar households and then try and put an average figure on this section of your budget.
- Emergencies - When planning a budget in advance, do keep room for emergencies. Set aside some funds for times when your budget will sway a little since a budget planned in advance is not very stable.
Once you have a working budget in hand, the next step will be to execute it. Remember since the budget was planned in advance, it will need some fine tuning for a while. Once you follow the budget, perk it up in areas where it needs to be corrected. Planning a budget in advance is not an impossible task and with a little effort you can create a pretty good household budget and an accurate one too