How To Create A Household Budget

Step 1: You Will Need

A pen, paper and calculator OR a spreadsheet program on your computer.
All of your monthly bills and receipts, pay stubs and any other records of income and expenses.
Statements for your checking, savings and retirement accounts.

Step 2: Tally Your Expenses

Start by listing all of your monthly expenses such as rent, mortgage, utilities, car payments and insurance. Use average amounts for bills that tend to fluctuate month to month.
Then estimate how much you spend each month on essentials such as gas, groceries, clothing and other supplies that help keep your household running

Step 3: Tally Your Income

Now that you know how much you spend, it's time to see how much you earn.
Add up all of your sources of income: salary, tips, odd jobs, pyramid schemes and buried treasure.
Remember, we're looking for the after taxes “take home” amount – your net income. Anything else is just, well, gross.
Take each amount and add it up it in a column called “Monthly income.”

Step 4: Compare

Now compare your total income to your total expenses.
If your expenses outpace your income, look at some non-essential areas where you could curb your spending.
If you have more income than expenses, pick an amount to set aside in savings and keep some in the budget as a buffer to guard against unexpected spending.

Step 5: Post Your Plan

Post your budget in a prominent place where all members of the household can see where the family's money is going.
You might consider using a whiteboard in case you find your earlier estimates were off the mark or if you want to make any changes.