Setting a budget for the household  is easy (it’s the sticking to it that can be a little difficlut). Here are some tips on how to get started for all those budgeting novices:

Before you create a budget, you would have to know first how much you spend in a month. Keep track of your expenses by keeping a financial journal. Write the date, the amount of the transaction, and the source of transaction every time you spend.

Observe how you spend. Seperate your essential expenses (rent, utilities, transportation, medical expenses, food, phone service) from personal ones (clothes, entertainment, personal outings, vacations, meals out, etc.) and find out where the bulk of your money goes.

Eliminate unnecessary expenses. In other words, cut it where you can. Look at the items listed in your journal. Perhaps, instead of eating out three times a week, you can just allocate expenses so you can eat out once a week and keep the money you’ve been spending as your savings.

Once you’ve identified how much you need to spend, you can now create your budget.

Add up your household earnings. Subtract the amount that goes towards taxes. Next, subtract the amount for your essential expenses. Do the same with the personal expenses. Anything left over should go to your savings.