It’s amazing how many of us really don’t have a solid picture of what our monthly budget is. We fall behind on bills and only pay them when the calls start and we never seem to have enough money. If this describes you there is a simple tool that can help you get your finances in order very quickly, a home budget calculator. This calculator will enable you to clearly see and identify patterns in your spending habits. Once you’ve found your habits you can identify weak spots and make the necessary changes.
For the most part, a calculator will allow you to input all your household expenses and your household income and it will show you, in the form of a graph, just where your money is being spent every month and how much, if any, money you have left over every month for investing or saving.
In order to make this work for you it’s very important that you not only enter the information accurately, but that you don’t forget an expense. Monthly payments like mortgage payments, car loans, and utilities are pretty easy to remember, but what about dry cleaning bills, school lunches, or gym memberships? This is where the process can start to fall apart. Your budget will only be as good as the information you put into your calculator so make sure you take a little time to gather all your expense information together.
You also want to make sure you have an accurate income amount. For some people who are on salary, this is easy to do. For many others, though, their pay may change quite a bit from one month to the next which can make it hard to plan ahead (it will still be easy to see where you spent your money in the past month which in itself can be helpful, but it’s not much good for planning into the future).
One thing you can do to overcome that problem is to take several months worth of your income and average it out. Obviously this won’t be completely accurate but it should give a fairly reliable representation of what your monthly income is.
Once you’ve gotten all your information in the calculator you can run the program to see where exactly you are financially. Unfortunately for many people, this isn’t going to be a fun exercise. Many people live off of credit and not really realize just how deep in the hole they actually are. This can be a real painful wakeup call.
If this describes you, don’t give up. Identifying the problem is the first step to fixing it. Once you see that you are spending more money then you are making it’s time to look at your budget to determine where you can save money.
Most people will immediately think they can’t save money since they are only spending their money on the necessities, but in most cases that’s not a very accurate assessment. In order to make your home budget calculator work you will have to be brutally honest with yourself and face the results head on.