Many things in life cause us stress. I don't know about you, but for me I think the thing that causes me the most stress is bills. If I were rich, this would be different, of course, because I'd have the money to pay my bills and debts with quite a bit left over. However, that's not the case.
I got tired of the constant headaches from being stressed over bills, so I came up with a simple monthly household budget plan to help reduce my stress. This plan has allowed me to have a little extra money leftover from paychecks to do as my husband and I want each month. In fact, it's worked so well for me the past few years that others have asked me to help them create the same budget plan for their household, which I gladly did.
If you are tired of the never-ending headaches and loss of sleep from not being able to come up with a budget that lets you pay your bills and still have a little extra money left over, try this simple monthly household budget plan I'm sharing with you.
Step 1: Create a Table of All Your Bills & Debts
Before you can even begin with a household budget plan, you need to know how much money is going out, when each bill is due and how much you owe on your debts (if you have them).
Create your table by starting a new text document using your favorite word processor program (I use Open Office, which is a free alternative to Microsoft Office). The table you create needs to have five columns: bill, frequency (how often you make the payment), due date, amount and monthly payment or payment amount (whichever you prefer).
When you enter the amounts for bills that vary each month (e.g. electricity, water, etc.), put an estimated amount for those. The estimated amount should be an amount close to what that utility normally runs you each month.
For debts such as credit cards, loans and etc. that have set minimum payments, try to budget in more than the minimum payment. This will help you to pay off the debt sooner and not pay as much interest. Using an example, let's say you have a credit card that totals $500.00, and you would like to pay that card off in 10 months. When you divide 500 by 10, you get 50. If you can work $50.00 a month into your household budget plan, you can have that credit card paid off before the year is up. If you can't go that high, you may have to set a goal of one year or a little over a year to pay it off. Just keep dividing the balance due by the number of months you'd like to increase it to until you come up with an amount you can afford to work into your budget.
If you have quite a few debts and/or would like some help trying to pay them off and figure out a monthly payment plan that will work for you, I recommend Undebt.it. Undebt.it is a FREE debt payment manager. I have personally played around with it a few times and found it to be very helpful. I also have plans to write a review about it and post that review here at Living Frugally.
After you've completed the table with all your bills and debts, insert a final row in your table, then "merge" the cell and include the monthly and yearly totals of all your bills and debts. Following is an example of what your table should look like.
Final Step: Prepare Your Monthly Household Budget Plan
Now that you've created a table of all your household bills and debts, your next step is to create another table for each month (January - February). You'll start a new page for each month. For example, page two will be January (page one is your list of bills and debts), page three will be February and so on.
Now, create a table with five columns. The columns will be payday, bills & amounts, total of all, check amount and left after bills. For payday, you'll enter the day of each payday. If you get paid weekly, insert four rows for four paydays.
The bills & amounts column will be the bills you pay on that payday, as well as the amount of those bills. Refer back to the table that lists all your bills and debts to fill in this information for each payday, because you'll need the amounts and due dates of all the bills and debts that you will be paying for that month. If possible, you want to pay them before their due dates to avoid late fees.
For each payday, it is also helpful if you can include an amount to put into a savings account for emergencies and/or a Christmas fund. You may also figure in approximately how much you will need for gasoline and groceries during that week.
Be sure when you are filling out your monthly household budget plan, you also include any yearly payments that may be due on the month you are creating your budget for.
In the total of all column, this will be the grand total of all the bills you will be paying with that day's paycheck.
The check amount column will be the amount of your paycheck for that payday. Since you will be creating your budget plan ahead of time, you can figure with an estimated amount, which would be an average of what your usual net income is. Let's say your paychecks are usually a little over $500.00 a week. In that case, just figure with $500.00. You can always adjust this and work things around, if needed, after you get paid, but for the budget plan, it's best to work with a number close to what you usually bring home.
For the final column, this will be the extra spending money you have left from paying your bills for that week. This amount could be more depending on what your paycheck will actually be for that week. Or if you had to miss a day or two of work for some reason, it might be less.
In an effort to help you better understand, take a look at the example monthly household budget plan below (click the image to enlarge it). The example budget plan does not include all 12 months. I just completed two months to give you an idea of what you will be doing. In addition, to make things easier when you are creating your budget plan for the entire year, you can copy and paste the tables to the new pages, and then just edit the months, payday days, bills you will be paying on each payday and etc..
In this example, we'll be using the bills and debts from the sample table in step one. This sample monthly household budget plan was created using an average net income of $500.00 a week, with the payday being every Friday. If this sample still does not help you and/or you have any questions, feel free to shoot me an email or leave a comment below, and I'll do what I can to help you. I can even get you started by doing a few months for you, and any information you give me will be kept completely confidential.
Additional Tips to Better Your Monthly Household Budget Plan
When the bill or debt has a big monthly payment, it helps to split the payment for paydays (see the example). You will, however, have to be able to hold some of the money and NOT spend it. If you are the type of person who does not have the willpower to do this, you can give it to someone you trust and ask them to hold it for you until you have the rest of it. Then when you have the entire amount, pay the bill or debt that it's for, before the due date.
Use your tax refund to pay off some of your debts. I always try to pay off the debts with bigger monthly payments. This helps me have more leftover from each paycheck. Naturally, though, the pay offs on some of those debts will be more than your refund, so you will have to work with the debts that are not bigger than your refund. And you can always choose to use the majority or all of your refund to get closer to being debt free rather than rewarding yourself with gifts. Using your entire refund to pay off debts truly is the best option, because you can reward yourself more than just once a year when you have eliminated monthly payments from your budget. Without those extra payments, you will have more left over from your paychecks. That would be nice, right? 😉
Put your cashback refunds from reward programs towards paying off smaller debts, or pay a smaller bill for a week that you may need extra money for an emergency vehicle repair or etc.. Furthermore, you can choose to put these small refunds into your savings account.
If you stick to this monthly household budget plan, I'm pretty certain you'll be a lot happier, have fewer headaches, and if the bills are the only thing that has been keeping you awake at night, you will fall asleep much faster as well.
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