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How to create a household budget

How to create a household budget

Most of us have financial goals – to get out of debt, buy a house, send a child to college, plan for retirement. These goals often evolve over time, depending on your personal circumstances. But one of the best steps you can take toward any financial goal is to develop a monthly budget and stick to it.

In addition, a budget will:

  • Help you ensure basic needs are covered
  • Lower stress
  • Enable good decisions when you know you can afford something
  • Help you continue to define your personal financial goals as they evolve over time

Getting started

Creating a monthly budget can seem like a daunting task. But our downloadable Excel spreadsheet will make things simpler.

Downloadable budget spreadsheet


Start by figuring out your average monthly household take-home income — salaries and any other income that your family might have.

Regular expenses

Some expenses are predictable and don’t vary much from month to month, and they tend to be due in the same order. These can include:

  • Housing costs: mortgage(s) or rent, utilities, cable, water/sewer, taxes
  • Transportation: car payment(s), insurance
  • Insurance: home, health, life
  • Expenses related to children: tuition, child care, etc.
  • Cell phone
  • Other regular monthly expenses: subscriptions to streaming music or video services, health club fees
  • Loans: personal loans, student loans, etc.
  • Taxes
  • Regular investments: retirement, investment, college funds

Expenses that aren’t fixed

Other expenses might be more difficult to estimate, but you can start to get an idea by looking through electronic bank records or credit card statements, and by saving receipts. How much do you typically spend on these items?

  • Groceries
  • Medical bills
  • Credit card bills
  • Entertainment: event tickets, vacations
  • Dining out (including lunches, dinners, coffees or snacks). Many people find they spend much more on this category than they’d realized.
  • Personal care: haircuts, nail care, etc.
  • Gas and vehicle maintenance
  • Charitable gifts

Budgeting is an ongoing process

As you continue to work with your budget, you’ll start to get a better big-picture sense of your finances – the more accurate your tracking, the better the benefit. We recommend revisiting your budget once a month, if not more often. Over time, you’ll get a better sense of these questions:

  • What things vary, and to what degree can you control the degree of variation?
  • Is credit card debt a significant problem, and would it make sense to consider a consolidation loan?
  • What are common surprises/irregular expenses?
  • Where can costs be reduced?
  • Can you put more money into savings?


Budgeting has the added benefit of helping you look at life from a perspective of abundance, rather than scarcity. Being in full control of your money helps you move toward financial goals, and feel good about it. Why not get started today?

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