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How To Create a Home Budget
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Today's economy requires that we all create a home budget. Here's how to do it!

Just a decade ago, the number of households without a household budget were many. When the economy was booming, you could get away with flying by the seat of your pants, so to speak. A few extra dollars spent here and there did not constitute a big deal. Lots of us found no need to create a home budget. Household incomes were generally more than sufficient to meet all of our financial obligations, with money left over. Although credit card debt continued to mount, while savings declined, most people just accepted that situation as the norm. Food costs were not a major concern and we regarded entertainment costs as necessary expenses in our daily life. Now, the picture has changed radically. Now, everyone needs to create a home budget to keep tabs on where each dollar is spent. Here are x easy steps to creating a home budget that keeps you solvent. The hardest part is getting started!

When you begin to create a home budget, make a thorough analysis of your expenditures. You've got to be objective and prioritize. Food, clothing and shelter are the only true necessities. Everything else falls into the category of unnecessary expense, albeit desirable.

For example, going to the movies is entertainment that now carries a hefty cost. You may think that cable and satellite services are a must-have expense. If you now find yourself strapped for cash, consider alternatives. Most people pay for internet access, as well as cable or satellite services. Alternatively, you might use the TV on the internet option. You can download the necessary software for free, with access to thousands of channels around the world. You'll need only spend $20-30 for  Home Budget Software to implement the service, a one-time cost. With a fast DSL line, you have both internet access and entertainment, with no monthly fee for satellite or cable service.

When you create a home budget, include your current income. Assets, such as stocks or IRA funds do not belong on the home budget. Don't count income that's not already earned. 'Maybes', such as a possible raise, also don't count.

List all of your fixed expenses on a spreadsheet. Create categories for each type of expense, such as entertainment, dry cleaning, business travel, gifts and the like. If you don't already save all of your receipts, start doing so. An envelope is all you need. Enter them on your spreadsheet and check off each receipt as you go along. You'll be amazed to find how fast food, magazines and other little incidentals creep into your expenditures without you even thinking of them.

As you spot these unnecessary expenses, this is when you may want to cut them out of your developing home budget. Consider diverting this money to budget for a reserve in home finances – aka a savings fund!

When you create a home budget, there's no room for 'cheating' or forgetting where your money's going. All the data is there in black and white, allowing you to manage your home budget effectively. You'll save money and be better equipped to meet all of your obligations without worry.

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