A budget can be an effective tool to better control household expenses. Budget the time to take this quiz and learn some good advice.
Cost of living is rising while available income seems to be shrinking. Some form of control is necessary to keep things going.
This what you earned after deducting income tax.
Gather all the relevant documents for the past year: salary slips, utility and other bills, as well as food, gas and all other expenses. Add up income and expenses.
Add up total expenses for the past year, including fixed items like mortgage, car payments, as well as variables like food, gas and gardening. Dividing by 12 will give you an average monthly expenditure.
Subtract the total annual expenses from the total annual income. A positive number means you live within your means.
It means you are living within your means -- you have a positive bank balance. In the days of financial ledgers, positive amounts were written in black and negative in red.
Variable expenses, such as food or clothing, by their definition, can be reduced as opposed to fixed expenses such as mortgage payments.
Try carpooling or use public transport. You could purchase a more fuel-efficient car when the time comes.
Buy only what you need and check for sales as well as outlet stores.
Find an additional source of income by selling stuff you don't need or do extra work.