Pinching pennies until payday has become a national sport. People shop at dollar stores, resale shops, and salvage food stores to save what they can and keep up with costs. These five priority categories to include in your household budget will help you rein in spending and end the month with a positive balance in your bank.
Mortgage or Rent and Utilities
It’s tough to have a household budget if you don’t have a household. If making rent or mortgage payments is consuming nearly all your monthly income, consider taking on a roommate (if you have space) or becoming a roommate to someone else to reduce your housing costs.
If they aren’t part of your rent, you’ll pay for electric, gas, water, sewer, and garbage collection, plus phone and internet access. Join budget plans with your electric or gas company to spread your payments evenly over the year and make monthly payments predictable.
Groceries
Eating in is cheaper than eating out, even as food prices rise with inflation. When you make your shopping list, cut items you don’t need. It helps if you make a weekly meal plan—that way, you can buy only the ingredients you need to make your favorites at home without spending on take-out.
Groceries also include essentials like laundry detergent and toilet paper. If you have the storage space for it, you might save more by buying in bulk from a warehouse store.
Child Support
If you’ve been through a divorce and have kids, you will very likely be on the paying or receiving side of child support. These payments are essential, and if you don’t make them or use them properly to support your child’s needs, you could get in trouble with the court.
Budgeting for child support means you must prioritize earning enough income to make your payments while also supporting yourself. If you receive payments, you should make a household budget based on your income alone to avoid misusing child support payments. This money should support your child’s needs, not your own.
Savings
“Pay yourself first” is a commonly cited rule of personal financial management. It may seem impossible to set aside anything from a tight monthly budget, but it’s critically important to your financial future. Even if you can only save five bucks a month, it will add up over time and gain interest.
Transportation
When money is tight, it’s time to rely on public transportation, ridesharing, or carpooling. The price of gas lowered some after spiking due to supply uncertainty earlier in the year, but there’s no predicting what will happen next. Take advantage of loyalty program discounts and employer benefits that help pay for bus and train fares.
Setting priorities for a household budget may feel like a chore. However, sitting down to calculate income and expenses is an eye-opening experience that will help you curtail unnecessary spending and save for the future.
