How to Create a Home Budget Template
Your home can’t have a strong financial foundation if you don’t create a budget. Yes, a home budget is that necessary. If you haven’t created it yet, you should start now. Don’t worry, you won’t do it alone. Here, we will give you the steps to create a home budget template to help you manage your money.
A Home Budget
A home budget, like any other budget, helps you monitor your income and expenses. It can help you reach your financial goals, be it savings, finishing mortgage, vacation funds and so on. If you haven’t started budgeting yet, we suggest you start now. There is no too late in budgeting. The steps below should help you to get started.
1. List the Reliable Income
List all of your reliable sources of income and add them up. By reliable here we mean those that you receive regularly. For example, wages, child support, alimony, etc. If you are self-employed, use your average monthly income instead. Remember, the income in your home budget template should be those that you can rely on.
2. Add Up All the Expenses
Next, write all your expenses. For the fixed expenses like rent/mortgage and property taxes you just have to monitor and add them up in the budget. For the variable expenses like groceries, electricity, water, and entertainment, write the expected maximum amount.
3. Calculate Net Income
Subtract all of the expenses from your income. The result will be the net income. You are in good condition if the number is positive. If the number is breakeven or negative, some adjustments have to be made.
4. Adjust the Expenses
If your income breaks even with your expenses or is less than your expenses, you must adjust your expenses. The first one you should adjust is your variable expenses. Cut down the number and remove the expenses if they are not necessary. A “wants versus needs” analysis should help.
Getting a Template
You can also find templates online. Many of these templates are free, too. You can download them and make some adjustments here and there so that the template fits your situation. Ready-made templates are also a good choice if this is your first budget as they will give you a sense of direction, which is very helpful.
The above is how you create a home budget template. Creating a template from scratch by yourself is not that difficult. It is, however, not the only way. You can get templates online as well. But, like a self-created template, it will need much tailoring to suits your financial situation.