Sometimes when you’re writing out a household budget for the first time it can be a bit overwhelming.  Sure, you know you pay bills every month, buy groceries and likely have a few miscellaneous expenses, but when you sit down to actually create a “working budget” you wonder, “Where does all the money go?” It is important to take care of the most important categories first.  You will want to begin with Food, Shelter, Transportation and Clothing,  then move on to other things like Personal, Entertainment, and Miscellaneous.  Some might call this taking care of your “4 walls” first.

Food is considered both grocery purchases and dining out.  Shelter is your mortgage or rent, and all your utilities, such as electricity and water.  Transportation is your car payment and gasoline purchases.  Clothing is self explanatory.  You will want to budget for all these things first.

Then you can move on to the less “necessary” items, but do not leave something off if you indeed spend money on it, this is where you get in trouble and don’t realize where your money is going so put everything you spend money on on your working budget.  The goal is to spend your money on paper before you actually spend it.  This will help you to see “where the money goes” each month and possibly begin to make changes to your spending habits.

Photo credit: linusb4