Personal Finance Management

Setting up Household Monthly Budget

BUDGET!! Brows frown! Face drops! You are just put off!!

These are usual scenario in every home when they hear the word BUDGET. Everyone feels it’s just a deduction on their “happy living” concept.But it is a misconception.
     You just need to SPEND SMART, SAVE SMART & LIVE SMART.
That’s the agenda of a smart household monthly budget.It helps you by preventing/over-spending on less important items.


You need a budget, if any of these statements applies to you:budget

◘ You earn well, but are unable to save.
◘ You are absolutely clueless over where  your salary vanishes.
◘ Sometimes, you are forced to borrow money to pay your bills.

 If any of the above describes you, then it’s time you start with a monthly budget planning, so that it channelizes expenses on your priorities.
After demonetization, economy has become cashless and your expenses are easier to track with your credit/debit card statements. Disadvantage is there is no control over the expenses. That is where budgeting apps come into picture. The applications keeps reminding you when you cross your budgeted expenses. They are available on GOOGLE PLAY STORE and APP STORE. Every time you swipe your card, you receive a notification and that shall alert you from further unnecessary expenditure.


Write down on a sheet of paper all your INCOMES:

► Monthly Salary
► Side Business
► Rent from properties you own
► Interest from deposits
► Dividends.

Next, calculate your FIXED EXPENSES:

► Home loan EMI
► Car loan EMI
► Health insurance
► Life insurance
► Car insurance
► Transportation – Petrol/ Diesel / Bus/ Train/Taxi
► Household utilities – Electricity
– Gas
– Water
– Telephone/Mobile Bill 
– Newspaper
– Milk
► Groceries
► Maid Salary
► Babysitter Salary
► Housing Tax
► Education Loan
► Kid’s School/ College fees etc.,.

Sum up all the above expenses.


If any of these expenses are paid in lump-sum, then you need to calculate them on monthly basis. Set the cash aside for them, else they may get spent on other unnecessary items and you will need to struggle on the due dates.


► Children’s activities
► Dining out
► House visitors stay and hospitality► Entertainment – Movie
– Picnics
► Gifts
► Personal Care & Toiletries
► Clothing.
Sum up all the above expenses.


Now, this is a very important step. Listing your Financial Goals


► Children’s higher education
► Clearing off debts
► Retirement goals
► Building emergency funds for next 3-4 months
► World round trips
► Purchase of assets
► Savings – SIP < Systematic Investment Plan>
– FD <Fixed Deposit>
– PPF <Public Provident Fund>  etc.,.


Once you are done listing all your expenses, sum up your (fixed + variable expenses+ financial goals) and subtract it from your income and whatever extra income remains can be added to your financial goals and will help you in securing your future. Such planning will automatically help you limit unnecessary expenses and will naturally channelize your hard-earned money into your priorities/commitments.


As a thumb rule, 20% of your income must be channelized to savings; 50-60% to your fixed/ essential expenses & 20-30% to your discretionary/variable expenses.
There is no hard-and-fast rule.This information is provided just to give you a foundation to create your household budget.It could vary within individuals and their financial commitments.



When you plan a budget,see to it that it allows you to be flexible. Flexible budgets are the best budgets possible, as they allow you to enjoy your hard earned money. Moreover, when you have some money left over in one category, you can use it for other category when you run short of cash in that category.

When you follow your budget plan for, say 3-4 months, you will definitely notice a pattern of your expenses and you can further plan where to cut down on your expenses and where could you invest more and make the most out of your money.

Aim to sticking to your budget most of the time and you are bound to reach your financial goals as planned. Breaking your budget occasionally is OK, providing you get back on track as soon as possible.

On the last note, your budget is your guide which will discipline you to live within your means. Too impractical/ambitious budgets are likely to fail. Flexible budgets are the best ones to enjoy.

Share with your friends if you liked this post on budgeting tips, it can help them too to create their own budget plan. Please leave your comments on the comment box below and share us your wonderful budgeting tips.Follow my blog page for further updates and posts.



10 thoughts on “Setting up Household Monthly Budget

  1. What’s up! Marvelous statement! I appreciate the way in which
    explained Setting up Household Monthly Budget. Excellent!
    Now it is capability to burn the best writes! It is a popular
    satisfaction to check out posts by using exceptionally stellar founder .

    A great sort of favourable posting any time you can’t
    make nicely. Some feature this sort hazard .
    Marketing ways to reduce your own personal details. In the event
    to go to resume services review you will
    find a web page containing more detailed consumer reviews of
    internet publication authoring business employers. You can choose this
    ideal and in addition take advantage of a great card stock you choose

Leave a Reply

Your email address will not be published. Required fields are marked *