Home Budget Tips to Keep your Expenses in Check

home budget tips

Home budget planning is not exactly a difficult task as you can become a master at that with experience and the availability of historic data. But keeping track of your expenses can be somewhat more difficult. Even more difficult part is to keep a check on unnecessary expenses so that the budget versus actual spending does not vary too much.

Here are some tips that will help you spend only as much as (or less than) you planned during your home budgeting exercise.

10 Tips to Stick to a Home Budget plan

1. Cut bad habits
Most of the bad habits such as smoking, alcohol-caffeine consumption are addictive in nature and such expenses will keep moving upwards as years pass by. More over they add more taxes to such drugs every year and it’s highly likely that you will never stay on budget when you have such bad habits.

2. More dine in than eat out
Eating out can be fun and easy but also a major budget buster. If you do not control your eating out habits, you are unlikely to stay within your planned home budget for the month. As a matter of fact, it’s good to plan the eating out budget to something like once or twice a month and be specific on the type of place you want to go. After all, eating homemade food is healthier and more balanced while costing several times lesser than the food that you buy in a restaurant.

3. Lower entertainment budget
Movie halls (with popcorn like add ons), theme parks etc aren’t exactly getting cheaper and you need to find alternate methods of having the same fun at much lesser cost. For example, you could always share a DVD’s cost with a neighbor or a friend if you both want to watch the same movie. By deciding to go for a movie several weeks after its release can save you a few bucks. The same is the case with Pay-Per-View options, the later you watch them after the release, the better.

4. Alternate holiday options
Holidays are must-haves to keep your life exciting and improve family bonding. At the same time, you don’t need to necessarily plan an expensive cruise or a Hawaii beach vacation to improve bonding and recharge yourself. There are always cheaper options within the mainland or in Far East Asian countries rather than going for expensive options. Also, make it a point to plan your vacation budget well in advance as part of your home budget planning. This will help in avoiding ad hoc travel decisions and save on air fare etc.

5. Pay as you go cell phones and call cards
A lot of people signup for long term plans with cell phone companies in order to get instant access to newer fancy smart phones in the market. These lifestyle options can actually trap you in a way that you end up paying a monthly minimum for many years as mentioned in the contract. A better option would be to go with less fancy devices and plans where you pay for the actual usage. Similarly, fixed line call cards may be the ideal choice for international and long distance calls rather than using your mobile or telephone company’s costly service.

6. Avoid credit card misuse
Use cash wherever possible! Credit cards are the biggest evil on the planet and the entire US economy collapse started with credit systems. Cash is still the king that will protect you from any credit trap! Try to live every day without credit and hence avoid becoming a burden to your own government.

7. The loan trap
Always keep a check on your loans. There may be people who will make you believe that owning a house has tax benefits but in a poor economy, you should think twice before signing up for a home. After all, going by the basic economics, not having any debt or loan itself is the biggest achievement in life. So paying down the debt should be given the first priority before making fresh purchases or going for new loan commitments. Typically, at any point of time, your monthly loan installments (combined) shouldn’t be more than 35% or 40% your monthly take home pay.

8. Keep an eye on historic expenses
To help you in planning for the future and to know the ‘actual inflation’ year over year, it is good to look back the expenses you had a year ago or a couple of years back. In fact, it’s not even bad to compare the bills over the years. It might sound stupid, but the more granular and historic knowledge you have on your expenses, the better.

9. Always commit to savings before spending
A lot of youngsters these days spend as much as they want before committing to saving for the future. The first step you have to do even before planning a budget is to make sure that 30% of your income is invested or saved first before spending any penny or even paying off loans. Budgeting is not only about planning where and how to spend but spending only that’s left after saving for the rainy days.

10. Use Home budget apps
Please read this article to learn about some of those free home budget planning and tracking applications (There may be a lot more out there)

Have fun with your budget planning and tracking!