New American Funding Blog

How to Budget: Create a Personal or Household Budget

By Ashley   |  November 6, 2013

Whether you are trying to build credit, pay off student debt, or are looking to buy a house, having a budget in place for your finances is a great practice.

Creating a monthly budget can help you keep your finances consistent and on track. This practice ensures that your bills are paid on time, helps you save money and creates awareness of how much money you can spend on things other than expenses. Continue reading for helpful tips on creating and sticking to a monthly budget.


Organization and Creating a Budget

Divide a paper into four columns. In the first column make a list of all finances you must pay monthly. This list needs to include every bill you must pay monthly or bimonthly. Include the due date of each bill as well as the minimum amount you must pay on it each month.  You can start with your largest amount at the top and work your way down to the lowest payment or you can organize it in sequence by due date each month. Don’t leave out any expense. Include rent/mortgage, student debt, cell phone, insurance, credit card, utilities, medical bills and anything else you might have.

The second column should be a list of expenses that may not be reoccurring each month such as haircuts, or vehicle maintenance costs. These should be things that are not immediate necessities but take precedence over splurge items.

The third list should be costs that you want to splurge on for the month such as entertainment. The final column should be a target number for how much you want to save that month. Although the savings amount can be lowered during tight months you want to treat this just as you would a bill. If you hold yourself accountable for this each month you are sure to see your piggybank alter for the better! Saving money is also a great way to secure your retirement, check out New American Funding’s Retirement Real Estate Financing.

Having this visual will help you map out your budget and show how much you  save and spend after all your bills are paid. If you’re looking for a quick way to get a glimpse of your monthly finances, this budget calculator is worth a look.


Put that Budget into Effect

Once you’ve taken the time to create your household budget it’s important that you enforce it. Every member of the house should be on board with the budget plan whether spouse or a child. This sets the limit on care free spending by each member. As an added bonus enforcing a budget with children can help teach them great savings and spending habits later in life.

Shop smarter and plan ahead. Having a concise shopping list will always help you stay focused on the items you truly need. This is especially important if you’d like to cut the amount of money spent regularly on your grocery shopping. If you are mindful of only buying the items you need, you will be able to stick to a budget.

Step away from the credit cards. If paying your credit cards off is a goal you have this year make sure you stick to the monthly payments and don’t reach for plastic when you want something outside of your budget.

 Our Family Budget is a great site that has articles for budgeting your household’s income.


Achieve your Goals, Reward Yourself

You work hard for your money and sticking to a budget can take discipline. Just like a strict diet, you should always leave room to reward yourself. If you are able to reach a savings goal and have a little bit of extra money to spend that month put it towards something you’ve had your eye on! Just like a savings goal, you can make a list of things you would like to work towards purchasing. Things that you need should always take precedence over things you want but don’t forget to splurge on something special once in a while.

Please feel free to share this blog with friends and family looking to budget!


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