How to Make a Budget for Your House

When it comes to managing household finances, budgeting is an essential tool.

However, many people don't know where to start in creating an effective budget.

Define monthly income

Before you start creating a budget for your household, it's important to know how much money is coming in each month.

To do this, you should add up all the income you have in your household, whether it's from your salary, freelance work, rents or any other source of income.

If you are married or live with someone else, it is important that you also include that person's income in your calculations.

If you have variable income, such as if you are freelance or work on commission, you need to take an average of your monthly income for at least six months.

Establish basic needs

Before starting any budget, it is important to define what your household's basic needs are.

These may vary according to your family situation, the area where you live and your living habits, in general they can be divided into:

• Housing: includes expenses such as rent or mortgage, utilities such as water, electricity and gas, taxes and repairs;
• Food: includes everything related to the purchase of food and beverages for daily consumption;
• Transportation: if you have a car or use public transportation, it is important to include the corresponding expenses;
• Health: includes medical expenses and medications;
• Education: if you have school-age children, it is important to consider expenses related to their education.

Housing expenses

Housing-related expenses are usually the largest expenses in a household budget. They include:

• Rent or mortgage;
• Property taxes;
• Utilities (water, electricity, gas);
• Maintenance (repairs, painting, landscaping).

You can look for ways to reduce them, such as being more energy efficient or negotiating a lower rent.

Food expenses

One of the most important expenses in any household is food.

To keep proper control of these expenses, it is important to make a shopping list and plan meals in advance.

It is important to include in the budget food expenses for breakfasts, lunches, dinners and snacks, as well as beverages and provisions for special occasions or unexpected guests.

Transportation expenses

In this section you should consider all expenses related to mobility, whether in public transportation, gasoline, car maintenance or insurance payments.

It is important that you also include expenses for eventualities, such as fines or unexpected breakdowns.

Remember that if you have more than one car at home, you should separate the expenses for each one.

Prioritize and reduce non-essential expenses

On many occasions, when making a family budget, we realize that we are spending too much on things that are not really necessary and that we could do without without affecting our lifestyle.

Therefore, it is important that we make a list of non-essential expenses and analyze them carefully in order to reduce or eliminate them completely.

Some examples of non-essential expenses could be:

• Having several digital platform subscription services;
• Going to the movies or restaurants frequently;
• Buying unnecessary clothes or accessories.

Once we have identified these expenses, we can decide which ones are most important to us and which ones we can cut back on.

There are always cheaper or free alternatives to entertain ourselves or give ourselves a gift.

Entertainment expenses

Entertainment expenses are important to the emotional and mental well-being of each family member.

These expenses can include activities such as going to the movies, going out to eat, attending sporting or cultural events, buying video games, among others.

It is important to remember that these expenses should be considered within the overall household budget and to allocate a reasonable amount for them.

If these expenses become excessive, they can negatively affect the overall budget and cause financial problems.

You can also consider more economical options, such as watching movies at home instead of going to the movies or finding special deals on cultural events.

Categorize expenses and keep a record

Once you have a clear idea of your income and expenses, it is important to categorize them so you can identify where you are spending the most money and where you can cut back.

You can create your own expense categories, but here are some ideas:

• Housing (rent, mortgage, utilities);
• Transportation (gas, vehicle maintenance, public transportation);
• Food (grocery shopping, eating out);
• Entertainment (movies, concerts, travel);
• Clothing and accessories;;
• Personal Care (personal hygiene products, hair care);
• Health (medical insurance, medications);
• Taxes.

Next, be sure to keep track of your spending in each of these categories.

You can do this in a spreadsheet or by using mobile apps that specialize in budgeting.

Adjust and review the budget regularly

Once you've created a budget for your household, it's important to review it regularly to make sure it remains realistic and is working properly.

You can make adjustments to your budget based on changes in your income or expenses, such as increases or decreases in utility, food and transportation costs.

Reviewing and adjusting your budget regularly is an effective way to ensure that you can meet your long-term financial goals and maintain a healthy balance between your income and expenses.

---