Like most large companies, a house is run like a business and so should be dealt with in a similar manner. The way people deal with their personal finances can often be lacklustre, though keeping track of it is of optimum importance.Unlike many businesses, which can account for their spending down to nearly he last penny, many households don’t know how much they spend on many of the things that come in and out, with many not keeping books at all.
So, what is the best way to keep a track on the finances for a home and what way should you best go about doing it?
A small investment in a notebook or cashbook can be a good start. Being able to keep a record of your outgoings and your incoming at all times makes keeping a record of house finances a lot easier. If you don’t have the discipline to remember, bring it around with you and write down the figures after shopping. If there are more than a couple of you in the house, ensure everyone has their own separate book to put money down in and budget with.
Transfer these figures into a ledger to get a better view of the whole households spending. This gives you an overall view of the household’s incomings and the household’s outgoings over a monthly basis. Include all the other things outside of the notebook in this such as bills, mortgages and other large and regular costs this allows you to project for the future.
If you are a little bit more up with computers and know how to create spreadsheet, then it is easy to keep a track of expenses through one of these. Spread sheets are faster, offer less work to do as they do the calculations for you and are also clearer than ledgers. Use a spread sheet in the same fashion as a ledger to record household spending.
Business software can also be used for household purposes and offers an even clearer view of expenditure and incomes again. This software is fit for the task and so offers an even wider range of functions than a spreadsheet. Business budgeting software can be gotten for a low price and is ideal for complete clarity.
When you do your monthly calculations it can then be very easy to see where the household is spending unnecessarily and so you can then easily make the cuts you need from this expenditure.
Keeping a clear and concise budget also means that you can set money aside for saving as well as for other things and allows you project for the future and anything nice that you wish for you and your family to have. It is simple, takes only a little time and is a good habit to get into.
Simon Grant is a writer and blogger who contributes to Fiscal Muses and has written this on behalf of Ulster Bank, a bank where you can apply for a bank account online.