ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

Saving Money: How To Set Up A Household Budget to Save Money?

Updated on June 22, 2011

Saving money is as important as earning money for your family, and setting up a household budget is the most important way to manage your family and personal finances. With proper financial planning, you can start saving money in a matter of months. Below are a few steps to set up a household budget to save money:

Step 1: Calculate Your Household Expenses

Take a piece of paper and write down your household expenses each month. Do this for at least two to three months to have an idea of how much your family is spending on a monthly basis. Write down each and every part of your household expenses including mortgage loan/personal finance/auto loan installments, utility payments including water and electricity bills, healthcare expenses, grocery bills, school/college fees, gas bills, entertainment/travel bills, etc.

Step 2: Calculate Your Household Income

On another piece of paper, write down your fixed household income. This should be the monthly income of each and every earning member of your family. Do not calculate income accrued from seasonal or temporary jobs.

Setting up a household budget is not very tough. If you feel it is taking a lot of your time, then you can download some free home budget softwares or household budget worksheets from the Internet.
Setting up a household budget is not very tough. If you feel it is taking a lot of your time, then you can download some free home budget softwares or household budget worksheets from the Internet. | Source

Step 3: Compare Household Income With Expenses

After making a list of income and expenses items, make a grand total and compare. If the net monthly income is more than the net expenses, then you are lucky as you have extra money in your hand. Start saving the extra money in your savings account, open a fixed deposit, or buy mutual funds. If the net monthly expenses are more than net monthly income, then you need to cut down on family expenses.

Step 4: Eliminate Unnecessary Spending From Your Household Budget

If you are reviewing your household budget every month, you will definitely find out a few items where you are spending more than required. Some non-essential items you can cut down from your family budget are gifts, entertainment, long drives every weekend, drinking and dining out, etc. You can actually save this money to secure your financial future.

Step 5: Increase Your Household Income To Save Money

There are several ways to increase your household income and save money and they are:

1. Writing articles on revenue sharing portals to earn extra money.

2. Part-time office jobs for saving money.

3. Saving money on utility bills like electricity and water.

4. Walking to the office saving money on fuel.

5. Living frugally to save money.

Reducing costs, living frugally, and increasing income with a second job are the best ways to start saving money. You just need to understand where you are heading with your family finances and financial planning, but you will only be able to learn all this once you set up a household budget.

Comments

    0 of 8192 characters used
    Post Comment

    • areinholz profile image

      areinholz 6 years ago

      Good hub - nice tips on saving money.

    • soni2006 profile image
      Author

      Rajinder Soni 6 years ago from New Delhi, India

      Thank you so much areinholz. Thanks for the review.

    • Ruchira profile image

      Ruchira 6 years ago from United States

      having a budget in this recession times...definitely helps!! Esp. since now thanks to the credit card we do not realize how much we have spent...until the card bill comes home at the end of the month :(

      Good hub esp during these times :)

    • soni2006 profile image
      Author

      Rajinder Soni 6 years ago from New Delhi, India

      Yes Ruchira, making a household budget and sticking to it definitely helps. Thanks for the comment related to recession.

    • avorodisa profile image

      Anna Sidorova 6 years ago from Russia

      Thanx for the practical and clever tips on how to save money!

    • soni2006 profile image
      Author

      Rajinder Soni 6 years ago from New Delhi, India

      Thank you so much avorodisa. I found that you are very fast and covering loads of topics since joining hubpages.

    • ocbill profile image

      ocbill 6 years ago from hopefully somewhere peaceful and nice

      I just ran into someone who said I like to spend without a budget. This made me think, of #5, well you've got increase your income. Make money online.

    • soni2006 profile image
      Author

      Rajinder Soni 6 years ago from New Delhi, India

      Yes you are right ocbill. It is not good for anyone to spend without a budget. Increasing income from online resources is a very good option.

    Click to Rate This Article