ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

Creating A Home Budget With Financial Goals In Mind

Updated on May 12, 2012
Family Budget Planning
Family Budget Planning

Your Home Budget

I think it can be agreed that a home budget is necessary. You want to make sure that you are allowing for enough money each month to meet all of your bills. The last thing you want is to end up short, missing a payment, and incurring late fees and/or added interest payments.

But, is that all you want to accomplish with a home budget? There are many discretionary budget items which allow you to spend as little or as much as you deem necessary each month. Things like groceries, entertainment, clothing, vacations, gifts, etc.. can be highly controlled.

It is extremely important to have some financial goals as a family. At least once a year, it is a good idea to sit down and talk about the things you want to accomplish financially. Maybe it is saving up for a big vacation, a new car or a down payment on a house. Having goals will not only help you to stay focused on your budget but will also help you in determining a practical amount for your discretionary items.

It can still be difficult to come up with a practical figure though, that you can stick with for discretionary items, unless you track expenses.

Tracking Expenses
Tracking Expenses

Tracking Expenses

I'm not going to try and sugar coat it - tracking expenses is a big pain. It takes a lot of discipline, at least at first, and seems tedious.

When my husband and I were first married, we were on a pretty tight schedule. We had lots of goals. We wanted to buy a house, start retirement accounts and have a good emergency savings account. That meant we had to really watch our expenses. We kept track of every last cup of coffee that we bought. It's amazing how much all of those little things can really add up.

Doing this exercise taught us where we were exceeding our spending frivolously. We quickly made adjustments that paid off for us. Instead of going out with friends, we would have them over for pizza. We used coupons at the grocery store and brought lunches to work.

After about our first year of marriage we were able to sell our mobile home and buy a duplex in which we rented the other half out for extra income. Each year we continued to write out new goals and re-evaluate our budget.

You don't necessarily have to track your expenses forever. Once you get to know your spending habits and adjust your budget, you can just work on sticking to your budget.  You will set your budget amounts at the beginning of the year but the discretionary amounts may blend together.  If you feel like you are spending too much on groceries you might spend less on clothes.  If you begin having to dip into your savings to cover your fixed expenses, then it is time to start tracking expenses again.

When I was tracking expenses, I used accounting paper - because I love my accounting paper - with headings along the top of each discretionary budget item. Down the side is where I dated and listed each item. I ran totals each month for each category.

Today there are some great expense tracking software options available. These can make the job a little easier.

Expense Tracking Chart

Date/Transaction 
Groceries 
Eating Out 
01/03 Bozo's Grocery Store 
$112.78 
 
01/04 Beano's Coffee 
 
$3.45 
01/04 McDonalds 
 
$16.85 
01/05 Red Lobster
 
$48.34
01/07 Starbucks
 
$4.23
01/10 Bozo's Grocery
$93.65
 
01/12 Wendy's
 
$6.34
01/14 Yuppies Steakhouse
 
$53.46
 
 
 
TOTAL
$206.43
$132.67

Small Section Of Expense Chart

 The above chart shows just a small sampling of expense tracking using just two categories over a two week time frame.  You can get the idea of how this is done manually.

Just continue the categories across the top of the paper and there would surely be more entries along the side for each transaction.  You could do a sub-total daily or weekly with a grand total at the end of the month.

This is an effective way of showing you just how much you are spending in each discretionary category.

Expense Tracking Software

IEMS - Income And Expense Tracking Software:  This software lets you track expenses daily while getting weekly and monthly totals.  It also has the ability to get a grand total for any date range that you may specify.  You can also track all of your income from all sources.

Keep Track Software;  Allows you to easily store your ATM, debit and credit card transactions.  You can keep a running balance of all your transactions and track all your finances including cash transactions.

Money Strands On-line Software:  This one automatically sorts your transactions into categories, allowing you to easily spot where you are spending too much.  It will also send an email whenever you have a low balance or approach a budget limit.  It doesn't get much easier than that!

Family Budget Planning

After you determine your financial goals and come up with the amounts that you feel you can live with for discretionary categories, you are ready to prepare your family budget. I have always used Excel to prepare our budget and the following video does a good job of explaining the process.

It is easy to make adjustments to a budget created in Excel. Any new calculations will be done automatically. After spending some time tracking your expenses, you may find it necessary to go in and change a budget amount for future months and with Excel this is easy to do.

Each new year just edit your budget with new income amounts from raises or any other changes.  After determining your new goals for the year and changes in family circumstances, you can also edit your expense amounts.

Do you currently track your expenses now?

See results

Comments

    0 of 8192 characters used
    Post Comment

    • Song-Bird profile imageAUTHOR

      Renee Hanlon 

      7 years ago from Michigan

      Good luck to you Amy! It does take some discipline but is well worth it when you are able to reach your financial goals. It's surprising how much money you actually have when you allocate it right!

    • amybradley77 profile image

      amybradley77 

      7 years ago

      Absolutely agree, tracking the expenses does help. You have to be willing to make those tough sacrifices and cut some things out of there too, in order for it to work at all. This is were most of us fail, I am just starting to get a bit better myself now. Wish me luck, I believe we all can use it in this area today. Great page!! Voted up! A.B.

    working

    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com 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: https://hubpages.com/privacy-policy#gdpr

    Show Details
    Necessary
    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 googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
    Features
    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)
    Marketing
    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.
    Statistics
    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)