How to make an excellent household budget

The job of making an excellent household budget may seem difficult. Here is a very simple guide so you can make yours today!


Sometimes it is pretty difficult to keep in touch about your gains and bills. In such a fast-paced world it is very difficult to stop, take a deep breath, sit down, and try to create a decent household budget.

This task is even more difficult if you don’t know where to start. Like many other things regarding economics, the number of things you need to look at may seem overwhelming.

In order to help you create an excellent household budget, here is a simple guide about some step-by-step you need to keep an eye for.

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Step 1: List your income

Before you have an idea of how much you expend your money, you need to have an idea of how much money you are bringing.

So, if you are a person who lives alone and has only one source of income, this step may be a piece of cake. However, if you have other people living with you and if you have multiple sources of income, it is very important you make a list and add up the amount of money you made monthly.

One last tip: especially if you have investments, try to make an estimate on how much you will gain on that specific month since an exact value is very hard to have.

Step 2: List your expenses.

Now, you need to have an exact idea of how much you expend per month. Here you need to be brutally honest with yourself and bring to the table.

There are two kinds of expenses: fixed expenses, which are the bills and debts you need to pay, and variable expenses, which means expenses that are variable regarding your behavior and way of life.

List everything you have, but beware, if you have any kind of expenses that are not monthly, you need to remember to add it up on your debts list every month you need to pay for it.

Step 3: Calculate your net income

Your net income is easy to stipulate from here, simply take your income – your expenses and you should have a positive number, that is your net income.

Well, even if you don’t have a positive net income or if you think the values are kind of odd, there are some other steps you can follow to solve this problem

Step 4: Adjust your expenses

Now it’s time to adjust your net income. In order to improve, you can either gain a lot of money, or you can have a more immediate and palpable approach, you can adjust your expenses.

This step is especially useful if you see that you have a very big amount of expenses that aren’t really necessary, especially variable ones, which are easier to take care of.

Taking this into consideration, you can either choose to have a goal, or you can use the 50-20-30 or the 70-20-10 method to separate your expenses. This way, you will take care of your financial health without any kind of trouble.

Last but not least, you need to keep track of your income monthly, but rest assured that the first step is the most difficult.

In the months to come, you will see how easier and faster to look at your household budget will be.

The most important aspect is: that you need to make this a habit, in order to not let your well-earned money be expended on things that are not important to you.

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