Careful monitoring of your household budget will show that it fluctuates significantly from month to month. Aspects such as heating, taxes and holidays all come into play and need to be accounted for in order to avoid stressful situations and to maximise your wellbeing and lifestyle. With that in mind here we investigate how to manage fluctuating household budgets.
A Clear Picture
The first piece of advice regards mapping and tracking your monthly incomings and outgoings and the best way to do this is by using your home computer. You need a clear picture and producing a simple spreadsheet will give you just that.
Go through your bank statements and input the data into your spreadsheet. Look for hotspots and make a note of them, so that when it comes to planning your budget, you can put a little extra aside. Events like Christmas are the sort of thing to look out for when your monthly expenditure is higher than usual.
Once all the data has been added to the spreadsheet you can calculate the totals – a good tip here is to copy and paste simple formulas from the internet and these will do the calculations for you.
Cut Your Cloth
Once you have an accurate picture of your expenditure month to month, you can then start to work out how to ensure that you have enough money at any given time. Generally speaking, in months where your outgoings are low, you should put any excess capital aside.
In addition to this, you should look for ways to save on luxuries or non-essentials. The idea here is not to cut out life’s pleasures altogether, but to take a sensible approach to when you indulge and when you are frugal.
If, having done this you find that there are some months where you are still short of money, you can look to take out a short term loan to cover yourself and then factor in the repayments.
In Case of Emergencies
A good financial plan will always have some kind of contingency measures in case of emergencies. Unexpected maintenance to a property or replacing expensive items such as cars can really throw your monthly finances off track and so having a contingency plan is paramount to success.
Follow these 3 simple steps and managing your monthly household budget becomes simple and once your plan is set out it is easy to adapt it should the picture change over time.
