ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

Household Budgeting For Economical Living

Updated on December 29, 2013

We are in recession

So, here we are in recession. It is so bad that entire countries are at risk of going bust. Jobs are as common as hens' teeth, each week heralds more businesses closing down and jobs lost, and you have to tighten your belt even more.



Many people could reduce their expenditure dramatically without really lowering their standard of living. If your income does not really cover your spending, or perhaps you just want to put more into a bank savings account, then it is important to know that It can be done, and likely much of it will not be too painful.
First of all you have to face up to what you can afford and what you cannot - and what is important to you, and what is not. Much of our spending is to maintain the image of ourselves that we present to the world, or who we want to be.
You could begin with cutting out casual spending – the break for coffee at a café, or a beer. Perhaps you meet for a drink in hopes of developing business prospects. If that really works for you, then well done. Otherwise, perhaps it is time to draw a line under that. Once you take all this on board, the spending cuts up to this point might go almost unnoticed.

It is vital to ensure that you do not overspend and end up getting into debt. It is a good habit not to accept offers of store credit cards, as these can end up being 'hidden' debts. All debts eventually have to be paid. Be wary of thinking that debt reduction schemes are an easy way out. They are strictly a last resort and not something you should consider an acceptable solution for too much lavish spending. After all, if it were that easy to reduce your debt then companies would not offer loans as it would be too easy for borrowers to write off the debt.

If your weekly shopping includes small luxuries try reverting to old-fashioned equivalents. In the food department, consider the budget or no-frills alternatives, You might find that they compare well against their heavily advertised alternatives, specially when you see the savings mount up.

You might find a street market, whilst perhaps unfashionable, provides decent quality without the fashionable prices.

When shopping for clothes, consider first of all just what you need for the lifestyle that you have now faced up to. Similarly, abandon the fashion labels that might have seemed so vital to you. Ask yourself whether you really need new clothes – is your old suit really so worn and beyond repair.

On the topic of home entertainment, an interesting fact is that the old-fashioned board games - often with dice, place-markers and so forth - cost nothing in electricity to use. Also, as I seem to recollect, they can be fun. Depending on your choice these can range from Monopoly to Ludo, or chess. Charades, quizzes and spelling games offer creative or intellectual possibilities.

Your new lifestyle

Applying these same principles to household appliances and furnishings, you could find the shabby or rough-cut chic adds another dimension, independent of current vogues. Taking the DIY repairs approach could open up a whole new philosophy for you. A DIY maintenance course at the local college, avoiding the beers afterwards, will give you new skills and perhaps new prospects.

How does your lifestyle compare against your consumer lifestyle before your spending revolution? You no longer follow fashions slavishly, and you question spending in detail. You have plans to save sums that before you might have spent without even thinking twice about it.

Your household might in some ways look like a throwback to twenty or more years ago. On the other hand it reflects achievement and commitment that cannot be had by merely showing a credit card.

Monitor and control your finances

Financial or money management in order to achieve this plan is important. This means a) monitoring your money matters to ensure that they proceed properly and smoothly, and b) taking measures when necessary to eliminate any problems in the smooth running of your finances.

In order to make this plan work, a little discipline might be useful. As with any plan, you need to state your objectives and targets. Your plan also needs a budget that shows when it is on-track and when your finances are out of control.
The ideal format for a household budget is a cash-flow plan.

A household budget can show income sources, various types of expenditure, and calculates the running balance.
To highlight how well the plan is going you could maintain two cashflows – your actual results and the planned version. Each version should show the same detail. Your target will be to make your actual running balance as good as your planned equivalent. Where it is not, the reasons will be found in the detail of spending and income.
As this analysis can become a job in itself it is important to identify what detail is needed to enable the financial controls you need.

Setting up the plan

Making the budget work calls for personal commitment from every individual in the household. If someone causes overspending perhaps they should have to spend less to compensate. Thus, motivation to keep within the budget will be built into this system. If this arrangement is agreed before the plan starts there can be no complaints.

When the budget does not go to plan

If matters are not going to plan – if, in other words, someone in the household is overspending - then it must be put right. It might a good idea for everyone to have their own personal budget. This will help ensure at the outset that everyone will know what to expect, and their spending discipline will be perhaps a little tighter.

Format of the cashflow plan

With a sheet of paper and pen or pencil, or using spreadsheet software if you have it:
If you using pen and paper, then:
a) write the weekly or monthly dates across the top of the sheet, allowing enough space in the columns below to enter details as in (a) to (d) below, and at the edge of the paper write on the first line 'Balance at start', on the second line 'Income', on the third line 'Expenditure', and on the fourth line 'Balance remaining'.

For each period, in the appropriate line and column:

a) enter the money in hand at the period start. This will be the amount of money left at the previous period end.

b) the income that you confident of receiving.

c) the expenditure you expect to make.

d) calculate the money left. (Balance at start plus income and minus expenditure in the period).

Also, for each period record your actual spending and calculate the difference.

This plan could be adapted, calculating average spending or noting major spending items or shopping lists.

Where you find you have overspent, determine what it was that you overspent on and remember to avoid that overspending in future. If you have overspent you might have to reduce your normal spending to compensate for that.

If you are using spreadsheet software, you can simply reproduce the paper-based system, using columns and rows. You can, of course, automate all the calculations of totals, running balances and any averages by using the spreadsheet functions provided.

Illustration of a cashflow plan, either with paper and pen or a spreadsheet

Period 1
Period 2
Balance at start of period
Income for period
Expenditure for period
Balance at end of period

The results and benefits

What your new, alternative lifestyle will not show is how much you are wiping off your debts or stashing money away for your future. When you decide you can live a little lavishly you will have opportunity to again follow fashions and keep up with the Joneses. You might also find that you value your ability to live without so much careless, lavish spending.

© 2012 Peter Ray


This website uses cookies

As a user in the EEA, your approval is needed on a few things. To provide a better website experience, uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at:

Show Details
HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
LoginThis is necessary to sign in to the HubPages Service.
Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
AkismetThis is used to detect comment spam. (Privacy Policy)
HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the or domains, for performance and efficiency reasons. (Privacy Policy)
Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
MavenThis supports the Maven widget and search functionality. (Privacy Policy)
Google AdSenseThis is an ad network. (Privacy Policy)
Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
Index ExchangeThis is an ad network. (Privacy Policy)
SovrnThis is an ad network. (Privacy Policy)
Facebook AdsThis is an ad network. (Privacy Policy)
Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
AppNexusThis is an ad network. (Privacy Policy)
OpenxThis is an ad network. (Privacy Policy)
Rubicon ProjectThis is an ad network. (Privacy Policy)
TripleLiftThis is an ad network. (Privacy Policy)
Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)
ClickscoThis is a data management platform studying reader behavior (Privacy Policy)