Tips on How You Can Manage Your Household Budget
posted on Friday, November 18, 2022 in Financial Tips
Saving and managing money are critical skills everyone needs to learn to secure a financial future. They help you understand where your finances go and allow you to plan your expenses. You’ll be able to track and monitor your spending habits when you have a household budget ready. Here are some smart ways how you can manage your finances:
Calculate Your Income and Expenses
You should first determine how much money you earn monthly and compare it to your bills and expenses. You can write it down in a notebook or use spreadsheet software like Microsoft Excel. Start by listing your sources of income, such as your salary, bonuses, and any investments you may have made. You can use an estimated amount if your earnings fluctuate often.
Once you’ve added all your income, it’s time to compare it to your expenses. List down everything you pay for each month. There are a few types of expenses you should know:
- Fixed Expenses – These are bills that do not change, like your mortgage or rent.
- Variable Expenses – This type varies monthly depending on your need and usage, such as your groceries, gasoline, and utility bills.
- Discretionary Expenses – These are your optional expenses, often used for recreation or entertainment.
Subtract your expenses from your income. The difference can then be used for other investments, paying off your debts, or added to your emergency fund.
Use a Budgeting App
You can also use a budgeting app to help you plan your expenses. They’re easy to use and integrate into your accounts. Today, they are now more accessible than ever. Some budgeting apps you can download now are Mint, You Need a Budget (YNAB), and Personal Capital, among others. Each app has features that can match your budgeting style and financial goals.
Set Up an Emergency Fund
It’s vital to save some money that can be used in case of sudden expenses like emergency medical bills or car repairs. An emergency fund creates a buffer that allows you to remain financially afloat. It will also help keep you from going into debt.
Making a budget doesn’t have to be complicated. Learning how to control your spending can help you achieve long-term financial goals. If you want to discover how to save more, contact us at Community 1st Credit Union and talk to one of our C1st representatives today.