The Household Budget Form

One of the first items when taking control of your finances is to organise them into a simple and usable form.

Primarily that means establishing a budget  … and for this you will need a household budget form.

There are a wide variety of budget forms, including; businesses,  organisations to which you belong  and, of course, the form for your own household budget.

It is not necessary to get into complicated software at this point, because in order to have a household budget form that actually supplies you with usable and actionable information, you will need to establish some history of your incoming and outgoing money .

Basically that is all a budget really is — a written form that contains information about the money that comes into your household, and the money you spend to keep the household running.

Let’s look at the supplies you will need to get started:
·    A pen
·    A small notepad (only about 3” by 2”)
·    Some three column paper  (or, if you wish and you feel very comfortable working with a computer,  a spreadsheet program such as either Microsoft Office Excel, Open Office Calc, or iWork’s Numbers for Mac)

Your household budget form will include the following, in the order shown:
·    column one – (either written or on computer) will be for the description of the items of incoming money or outgoing money (expenses)
·    column three will be for the amounts of  income items, such as  salary, residuals, commissions, pension payments, interest earnings, etc, that you receive on a regular monthly basis.
·    column two on the household budget form is for all the amounts of the expense items. These include thing such as rent or mortgage payments, telephone and cell phone, gas, hydro, internet, cable TV, property taxes if you own your own home, insurance (even if you rent, you will have contents insurance) car lease or payments, gasoline, car cleaning or maintenance, health and life insurance, medical and/or dental bills, clothing, entertainment, charitable donations, education, vacation and travel and credit card payments if you have outstanding debts.

Once all of this has been entered, add up each of the columns. Your hope is that column two will be less than column three. If this is the case, it means your household budget form is telling you, you are living within your means.

If the opposite is true, you have a financial problem, and I will discuss bringing this under control in an upcoming article.