How to create a budget that works + free budget templates
Last updated on 9th February, 2021 at 01:53 pm
Creating a household budget is the best way to control your family’s finances. Contrary to popular belief, budgeting doesn’t have to be a tedious task of complicated formulas and equations. Like most things in life, there’s a benefit in keeping things simple – here’s how you can get started:
- Work out your net income
The first step to creating your budget is to work out how much money is coming into your household. Work out all the net income (what you bring in after tax) of everyone contributing to your household. That could be you, your partner, parents or children.
- Outline your fixed expenses and discretionary costs
It’s important to know where your money is going. Your budget should include fixed costs (your rent/bond, car, school fees etc) and discretionary (entertainment, gifts, clothes, luxury items etc) costs. Don’t leave things out that you know you’ll spend on – your budgeting won’t work if it isn’t honest about all those little expenses that creep up each month. Be realistic.
- Make it a team effort
Gather your spouse and children and draw up a list of your family’s needs and wants together. This will sensitise your family to prioritise important household necessities and nice-to-haves from a young age. Read more on raising money-wise children here.
- Set a goal
It’s easier to stay committed when you have something to work towards. Whether it’s saving for a family trip, a big-ticket purchase or something small such as an extra treat for the family – write these goals down and keep revisiting them as an incentive for sticking to your budget.
- Prioritise your debt
Your budget should incorporate your debt as well. Include your monthly payments and try to make provision to pay in extra, too. Interest on debt will cost you big in the long run – and the best way to make an impact on this is to pay more than the minimum amounts on any debt.
Ready to get started?
Download your free Family Monthly Budget Worksheet.
Download your free Personal Monthly Budget Spreadsheet.
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