Why You Need To Keep A Household Budget

Keeping a household budget has not really been top most on my list of priorities. To be honest, it was hard to do so when it seemed as though our income could barely cover half of our expenses.

Speaking with a number of my friends, I know this is not just a me-problem. It’s one that most people face. If you are having a hard time keeping a household budget, or maybe you think it isn’t even neccessary, well then, you definitely should read this article.

There is no guarantee that once you’re done reading, you will suddenly feel supernaturally inspired to sit down and draw up a budget. No, that would be taking things too far. But, you will begin to think of a household budget as a positive thing. And who knows, maybe you might discover more practical ways to budget.

household budget benefits

What Can a Household Budget Do For You?

We work hard to earn a living. We should make sure we spend the money we bring home wisely. That’s where a household budget comes in. It’s a good tool to see at a glance what we have coming in, what’s going out (and what that money is paying for) and if there’s anything left at the end of the month to put into savings.

Before we dive into exactly what a budget can do for us, let’s consider for a minute what will happen if we’re not tracking income and expenses. We may end up spending more than we’re making in a given month (or two, or three). Over time that can put us into some pretty hot water financially. We may also spend a lot more than we’d like to believe on things like eating out, going to the movies or new clothes.

If you haven’t read our Book of the Month, The Smart Money Woman by Arese Ugwu, you should because if you don’t track your spending, you are going to end up like Zuri.

debt and household budget

Having a budget gives us more control over where we want to really spend our hard earned cash. Maybe that’s dinner and a movie, but maybe it isn’t. Wouldn’t it be nice to have an actual choice?

It Tracks Where Your Money Is Going

A budget simply tracks your money. You record where the money comes from each month (your income) and then write out everything you spend it on, starting with your regular monthly bills like mortgage or rent, utility bills etc. What’s left after all the bills are paid is your discretional income.

Helps You Identify Things You Waste Money On

Having it all in front of you in black and white helps you identify things you’re wasting your money on. And you would be really surprised when you discover where a lot of your hard earned cash is going to.

It makes you reconsider if you really want to spend well over 13,000 Naira a month on Cable TV or 20,000 Naira on call and data plans for your cell phone. You might begin to wonder if you really need to go see a movie every weekend or if you need those designer shoes you buy every month. Go through your expenses and reevaluate if this is REALLY how you want to spend your pay check.

tracking your household budget

Allows You To Be Proactive About Savings

Most of us have some sort of savings plan. Well, maybe calling it a plan might be stretching things a bit. We just have this habit of dumping a few bucks in our savings, not every month, but most months. But not many people are actually intentional about saving money.

The truth is, saving money without a budget is hard. We go in with the best of intentions at the beginning of the month, but somehow there isn’t anything left at the end of the month.

A budget gives you a chance to be a bit more proactive. Set aside some money for savings at the beginning of the month, even if it’s just 2000 Naira. Put it in the budget as a regular expense, just like you do with your other urgent bills. If you need to, open a separate savings account so you’re not tempted to spend it.

household budget why

Ensures You’re Not Spending More Than You’re Making

Most importantly, your budget will keep you on track and help you make sure you’re not spending more than you’re making. And I don’t have to tell you that that’s pretty important for your financial wellbeing.

Ready to create your personal budget? Then this article from SheLeads Africa will help you get started.

Do you have a household budget? How is it working for you? Share your experience with us, leave a comment we’d love to hear from you.

 


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