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Creating a household budget is one of the best ways to save money for you and your family. It allows you to track and control your spending, which helps you to find potential issues and deal with them. 

Whether you’re saving up for a big expense, or you simply want to pay off your debts, creating a budget is a great way to improve your household financial situation. This guide will help you through the process of budgeting for your household.

Working Out Your Income and Expenses

The first step to achieving financial freedom is to determine what your current financial situation looks like. This isn’t a time to make estimates or guesses on your income and expenses. You need a clear an accurate picture of what you earn and what you spend, ideally over at least three months. 

Your bank statements can be a great help, especially if you use online banking to keep track of your spending. Otherwise, save any receipts from purchases and write them down. As well as this, make sure that you include your regular bills and expenses. 

You should also keep a regular note of your income. If you have a job that pays a weekly or monthly salary, then this is simpler, but make sure to include any side hustles or other sources of income as well. 

If you can’t get an exact idea of your spendings and income, then it’s best to assume round the spendings up and the income down. This way, you’re likely 

Creating a Goal

Ideally, you should budget or save your money with a goal in mind. This will keep you motivated and give you a clear idea of what you’re aiming to achieve, rather than a general goal of “improving my finances”. 

Even if you’re budgeting mainly to improve your financial situation and give yourself some extra funds, you should have a concrete target to reach for. Once you have an idea of your income and expenses, your first goal should be to make sure that your income exceeds your expenses. 

This is a simple goal that will automatically give you some more breathing room. Once you’ve achieved that, then you can move on to more specific goals. If you have any debts, then your goal should be to eliminate as much debt as possible. If not, then you can move onto the goal of saving a certain amount each month.

Using a Spreadsheet

You can use multiple tools to help you when you’re creating your budget. Some are more complex than others, ranging from pen and paper to specialised tools. One great tool that many people use is excel, a program that allows you to create spreadsheets.

Spreadsheets have many purposes, but they can be great at helping you to arrange your budget and work out how much you spend. The SUMPRODUCT Function, for example, can be used figure out the costs of what you’re purchasing. This function is fantastic for personal budgeting and business budgeting alike, allowing you to see exactly what you’re spending or earning on various products. 

Other spreadsheet functions achieve different results, and they can make running a business and running your life easier.