How To Manage Your Household Budget

Budgets are a valuable part of a functioning household. We often like to spend and promise ourselves we will worry about the budget and the consequences later, but we rarely do.

Do you find yourself scraping the bottom of the piggy bank every month just to make ends meet, confused about where your money might have gone?

You’re not alone! Just a few quick steps could help you manage your finances and create a household budget.

By calculating your finances properly, you may find you have more money left over to spend on the things and experiences you enjoy. So, let’s take a look at ways you can get organized.

Ways to get your budget in order:

1. Shop around. Sometimes, we spend without realizing we could be getting a better deal elsewhere.
   
   
   • Next time you go to the store to buy food for the week, make a quick note of how much you are spending. Perhaps visit a different store each week, and work out whether the same purchases work out cheaper elsewhere.
     
     
   • Shopping around is a vital part of managing finances. Sometimes, branded goods can be cheaper in different places, saving you money and helping your household budget.
     
     
   • Don’t just shop around for groceries. Consider car financing, energy bills, and water. Are there comparison sites or better deals that could help you save money?

2. Calculate incoming and outgoing funds. A coffee here and a pastry there can impact your finances.
   
   
   • Determine your outgoing funds each month. This could be your bills that have to be paid monthly.
     
     
   • By working out exactly how much you spend a month on essentials, you can calculate where the rest of your money goes.
     
     
   • Balancing finances will give you a clear understanding of exactly how much you can save and spend each month. This takes the stress out of worrying about what you can afford to spend and where you can indulge.

3. Savings are important. Have you heard the expression ‘save for a rainy day?’
   
   
   • There’s truth to it. Since life can throw unexpected things our way, it makes financial sense to keep a little bit aside. By doing an income and expenditure calculation, you can incorporate savings into your life and have security should you face unemployment or an unexpected bill.
     
     
   • Create savings goals. Work towards a new car, a house, or a holiday. Think of incentives to help you save, not spend.

4. Consider where you can cut your spending. Work out what else you are spending money on.
   
   
   • Consider your car, transport, luxuries, indulgences such as coffees and cabs, and work out if there is anything that can be cut back. Could you walk or cycle rather than get the bus? It all helps!
     
     
   • Saving money on unnecessary indulgences could give you more money for luxury breaks, hotel upgrades, or just more money to spend on yourself or your family.

5. Consider loyalty programs and look for discounts. Does your favorite store have a points or reward program that allows you to exchange your points for savings?
   
   
   • Even building up points at your favorite store may allow you to reap the rewards. Some stores allow you to convert your points into cash or discounts. It’s the small savings that help.

You don’t have to cut everything out of your life. Being aware and making small adjustments to your spending can allow you to save for financial security, trips away, or small gifts for yourself and others with money you didn’t know you could afford to spend.