Managing the Household Budget
It’s a new year and most us have set financial goals whether that’s saving for a holiday or a new car, paying down debt or, if you’re lucky investing. This year I’m having a ‘quiet’ year, in other words I’ll be paying off debts and trying to build up some savings after the extravagance of last year (several trips away including a two week holiday to Disneyworld) I’m sure many will be focusing on this given the economy.
I’ve had many ‘systems’ in the past for maximising the household budget from the ‘if it’s in the bank then we can spend it system’ to the ‘account for every penny in a detailed spreadsheet system’. I currently use a system whereby I calculate my projected expenses for the year, allow for a monthly entertainment budget and then set that figure aside weekly. The rest goes towards paying debts or accumulating savings. I’ve found this to be the simplest and most efficient way to manage the household budget, it doesn’t allow for much wayward spending and monetary decisions need to be made consciously (no mad spending sprees at chez littlemummy I’m afraid). On the plus side I do feel that we get a lot of ‘bang for our buck’ especially in the entertainment category as we’re always looking to get the best value (note: this doesn’t always mean the cheap option, often it’s the opposite).
Do you budget? How do you manage the household income?
I really should follow your example … ahem
I am crap when it comes to money. I need to steal a spresdsheet and get to it.
I’m with Laura, and I don’t know one end of a spreadsheet from another. I do occasionally shop at Lidl, though, does that count?
I may come across as slightly anal, but I’m afraid I track everything on Microsoft Money. It really is fab, and gives you all sorts of forecasts and projections. Did you know, for instance, that at my current rate, by Jan 2015 I’ll have saved ?45000?
(I made that up)
I used to be a spreadsheet girl, infact we still do, but at the moment as cash is super tight. I calculate what needs to be spent on food, extras, school lunch and draw it out in cash and then pop it in little purses I made with the names on!!
I am going to blog about it, but needed to get my issues with my littlest man sorted and my PC issues resolved once and for all
I can only plan the monthly budget and I do that on an excel spreadsheet but frequently forget to consult it. At the moment there is no allowance for savings. I’m not in a position to plan too far ahead at the moment, we live from month to month but I expect many people are in the same boat, and we manage.
I use a piece of software called You Need A Budget, or YNAB. It’s a phenomenal program, and as of its latest version it is also cross-platform, so I can use it on a PC or a Mac. It does require noting down every time that money flows in or out of your life, which sounds like a load of hassle until you actually start doing it every day, when you realise that aside from major splurge shopping days (which you shouldn’t be doing anyway if you’re trying to save money), most of us make relatively few distinct purchases in a day. Now that I’ve got the habit of recording transactions (I use my iPhone for this, as it’s always with me), I feel odd if I don’t.
The other strength of this program is the methodology associated with it, the mainstay of which is the idea of a ‘buffer’. This is the concept of gradually saving a full month’s expenses so that you are, in effect, living off last month’s money and can much more effectively budget as well as handling unexpected expenses. If you’d told me five years ago when I was swimming in overdrafts etc that that was even possible I’d have laughed at you, but this software makes it easy to plan how you’re going to get there.
It’s got a 7-day free trial, and once you get your head around the rules it’s a very powerful concept. I highly recommend it.
I try and do as little money management as possible. I always find the best way to motivate myself to work is to check my bank balance and get a nasty shock