Did you know April is Financial Literacy Month? Getting a home in order also means taking a look at your finances. The wonderful thing is there is a ton of information about how to create a household budget, how to adjust your expenses, and how to stay on track with your budget.
Over the years, I’ve learned there is 1 rule for creating a household budget (or a spending plan – use whatever phrase comes naturally): you must write down all of your income and your expenses to get started. You really need to know how much you spend on toilet paper each month or on food or gas.
Sometimes people try to eyeball it, but starting out you need to know your household’s exact income and your household’s exact expenses.
How do you get started? A pen and paper or your smart phone, pick a date, and then write down every dollar you spend for 30 days. During this process, look at your expenses, and take the time to think about the purchases.
There’s a ton of great resources online, here’s two of my favorite links:
http://www.mymoney.gov/index.html Federal Government website for financial literacy
http://squaredawayblog.bc.edu/ The Squared Away Blog from Boston College is always a great read.
http://www.caflm.ca.gov/ State of CA’s website for Financial Literacy Month
Don’t forget to use your local library as a free resource! Here’s two of my favorite books about personal spending:
Your Money or Your Life by Vicki Robin and Joe Dominquez
The Two-Income Trap by Elizabeth Warren and Amelia Tyagi
It’s a lot of hard work to bring an awareness to your household finances. For some people it’s depressing at first, but liberating once you face the facts, and figure out a game plan to make it better.
For my household finances, I feel better when I know what’s going on. Looking to the past, I can’t believe I spent so much money on dinners out, CDs, DVDs, and movies, but those spending patterns are in the past, and the future is the only thing that can change.
Good luck and we’d love to hear about your successes or challenges in creating your household budget –Jeanne