Money today doesn’t go as far as it used to. With escalating prices of goods and services, creating a monthly home budget is in your best financial interest.
Decide on the format
Keeping track of your spending should be in a format most comfortable to you, whether that is on a spreadsheet or in a notebook. Many people opt to keep track of their earnings and expenses on a computer program such as Excel. Do what works best for you and your family. There are no hard and fast rules here. The important thing is to take stock of what comes in and what goes out and to make it an enjoyable experience by using tools you can easily work with like a simple mortgage calculator.
Keep expenses in categories
Entries should be easily tracked, so categorizing them would be best. Some categories could be:
- Rent or mortgage. If you’re thinking about homeownership, consider using a mortgage calculator tool to ascertain this probable monthly figure;
- Utilities like hydro, water and gas;
- Household maintenance, such as gardening or home cleaners;
- Transportation costs: car payments, insurance and maintenance; and
- Groceries and food-related expenses like dining out.
Set goals that are realistic.
What would you like to see your financial world look like in a year? What is it that is important to you financially? Once you’ve given this some thought, planning becomes much easier. For instance, if you don’t own your home, perhaps that is a goal. Use a mortgage calculator tool to see how much you might be able to afford when it comes to a monthly mortgage.
Separate your wants from your needs
We all want things that we don’t necessarily need. When it comes to budget planning, it’s important to distinguish the two. Will spending money for something you don’t really need be beneficial to reaching your financial goals? You have to ask yourself that question if you’re serious about budgeting.
Be gentle with yourself
If you’ve never had a budget it may take a few months to get into the swing of things. Go easy on yourself. You may make a few slips here and there. If things start to feel too overwhelming, talk to a friend who is great with budgeting or perhaps enlist the aid of a financial planner. Whatever you decide, remember this is your plan for a brighter