Step 3: Calculate Your Total Monthly Incomeīefore you can decide how much to spend every month, you need to know how much you make. Winter and summer utility bills can vary drastically. Have several months of utility bills to get the average cost.Add up ATM withdrawals for things you spend cash on.Look at bank and credit card statements for discretionary spending on things like coffee, eating out, and clothing.Don’t count overtime pay unless it’s regular and consistent.Some things to keep in mind when sitting down with your finances: Before you sit down with this household budget worksheet, grab your recent paystubs, bank statements, credit card statements, and utility bills. This can help you understand your high-level budget, but it doesn’t tell you much about your discretionary spending. Your total DTI (the portion of your income needed to cover all of your monthly debts, plus mortgage payments and housing expenses) shouldn’t be more than 36 percent. As a general rule, your housing DTI (which includes your monthly mortgage payment, property taxes, homeowners insurance, and HOA dues) should be 28 percent of your income or less. This divides your monthly debt payments by your monthly income. When you bought your home, your lender probably calculated your debt-to-income ratio (DTI). Chances are you can’t change how much money you make, so you’ll need to make spending adjustments. The only way to trim the fat off your budget is to take an honest assessment of what you spend money on. If you’re like many folks, you may have been avoiding a budget because it can be hard to confront how much you spend versus how much you make. The first step to making a reasonable budget is to take a cold, hard look at your finances. Get Your Household Budget Worksheet Step 1: Be Prepared to Confront Your Finances We showed you how to make a budget after buying a house, but now let’s take it one step further and build that budget. By identifying what is a necessity and what isn’t, you can start to access how your discretionary spending affects your monthly budget to make adjustments. A good budget worksheet helps identify what your needs are and what your wants are.
It helps you to identify how you’re spending your money and ways you can reallocate your money. That’s super important considering most Americans can’t afford a $400 emergency expense. Making a budget – and sticking to it – is one way to make sure you can handle emergency expenses, like small repairs or vet bills. That can be as simple as dedicating 50 percent of your money toward needs, 30 percent toward wants, and 20 percent for savings or debt repayment. A functional household budget simply accounts for money that comes in and money that goes out. Your household budget doesn’t have to be complicated.
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