Household Budgeting: Developing an Effective Budget

How do you make a budget?

1. At the top of the page write down the income you bring home each month.
2. Then, write down everything you spend money on each month. Most people remember their rent payment, but they often forget the coffee they buy on their way to work each morning. We recommend that with every purchase, you make note (such as on your phone or a small notepad) of everything you spend money on, including newspapers, lunch, magazines and your morning coffee. By recording it you will have a complete list of all of your expenses, which will make it easier to create your budget. Your account statements may assist as well.
3. Once you have your budget in writing, make it work for you. What are your financial goals? Is your budget accomplishing these goals? If not, you need to modify it. You may have to do this by either:

• • • cutting down or modifying your expenses; or
    • increasing your income.