How to keep track of household expenses?

Hai,
I buy grcery from my neighbourhood grocer, he gives a discount even on branded items from MRP. But in the supermarkets, we have to pay MRP only. I buy only the things which are not available with him.
But as Srividya said, going to the supermarket will surely tempt one to buy unwanted things. I try to avoid this temptation by making my hubby wait in the car, so that I will buy only what was essential and rush.
And I make a list in the start of the month and buy in one go. Vegs I buy as and when needed.
But I am sorry to say, I never keep account. I just had not done that so far. And my hubby has a spontanious spending habit, so budget planning is also of no use.

Ladies I found this article on the net. I am sure it would be useful to all.

How to Manage Your Household Budget?

Whether we like it or not, it’s important to have a household budget so that both ends meet and ideally with something left for saving.
'Money doesn’t grow on trees’. We all know that. But it’s said that wants are unlimited. With our limited resources we can’t buy everything we want. We therefore have to prioritize our wants and plan our expenditure accordingly.

Whether we like it or not, it’s important to have a household budget so that both ends meet and ideally with something left for saving. A budget takes into consideration past expenditures, an estimate of future expenditures and the distribution of current expenses on various items over a certain period of time.

There are three types of budgets:
Surplus: where income exceeds expenditure
Balanced: where income is the same as expenditure
Deficit: where expenditure exceeds income. It is but common sense that you need to aim at achieving a surplus budget.

Steps involved in making a budget:
The three basic steps in making a budget are: making an estimate of the income, an estimate of the expenditures, and bringing the expected expenditures and incomes in line.
· Make a list of the commodities and services required by family members throughout the proposed budget period.
· Calculate a realistic estimate of the costs of the desired items.
· Group the items on the purchase list together under different categories like food, income tax, housing, transportation, electricity, telephone, clothing, medical bills, education etc.

It’s crucial to involve all family members including children while making a budget. New Delhi-based writer Swati Chopra agrees, stating, “I feel children must value and respect money and so should be encouraged to make their own budgets. It teaches money management, and may be a good exercise if done with parents to instil the values of using rather than consuming (i.e. buying what you really need and not because you can).”
“It can also be an opportunity to talk about economically sustainable lifestyle choices, such as buying cotton rather than synthetic clothes, how to limit paper consumption, electricity consumption, and so on, and telling children the value of each of these choices. I don’t think it is necessary to involve young children in the family budget but they can be included once they are mature enough to understand what is going on.”
In the Indian joint family setup, expenditures on dependent family members should be taken into account. Each family member should be reasonable in determining the amount to be paid of them, be generous enough to allocate more funds to a family member who really needs it (for medical treatment or education), and be objective while chalking out the budget taking the welfare of the whole family into consideration, rather than personal interests only.
Prioritise expenditures according to needs, and eliminate unnecessary expenditures that don’t fit into your budget. Mrs. Ramanathan, while budgeting categorises household expenditures and spends prudently, “The sum total of expenses include fixed and variable expenses. Fixed are essential costs, which can't usually be reduced or minimised, like food, repayment of housing loan, flat maintenance charges, school fees. Variables are essential expenses like phone, electricity, clothing but they can be under our control. The number of calls or their duration can be reduced if planned, and the use of the AC, geyser and microwave can be moderated.”

Every budget should pass through a reality check. It makes little sense to keep the expenditures ridiculously low, compared to what is actually required. A budget needs to be checked on whether the needs of the family members have been met, the ability to pay bills or debts have been assured and inflation rates have been taken into consideration. Also keep aside an amount for emergency funds.

How to monitor your budget:
Keep a reality check on your budget. Check if your monthly spending is going as planned at the end of each week and fortnight. Have you been spending beyond your means? Have unforeseen expenditures cropped up? If you’ve overspent in a week try to curtail expenditures the forthcoming week to adhere to your budget.

Brainstorm your family for ideas to cut down on expenses. Swati suggests, “Try to come up with ideas for alternative ways of meeting needs that may be healthier and ecologically more viable. For example, using envelopes and the reverse of old notepads to save paper, organizing car pools to school or work to minimize petrol costs, walking wherever one can instead of taking autos or cars, using the cell phone only when necessary, and so on. Cultivating an attitude of contentment and simplicity greatly helps too.”

Why it’s smart to budget:
The word budget may give the impression of an unfavourable restriction to the layman. In reality budgeting only has positives. A budget ensures that you are not controlled by money, but rather it is you who controls your money with the aim of purposeful spending and judicious saving.
It chalks out a plan so that the family can enjoy itself to the best of its ability within whatever resources it may have. It helps to prevent the family from being extravagant and falling into debt. When the money saved by successful budgeting is used later to buy your dream house or plan a tour of your lifetime- you’ll be glad that you did take the efforts to make budgets and stick to it through out the years.

Hope this will help.
CBI

Hi shal,


I joined this forum recently, thank you for your excel sheet, I feel it is useful for me..

roo

Dear Roopika,

Thanks for liking the excel sheet. Yes, I agree it comes helpful especially during times when we are planning to buy an expensive commodity. I usually save litte by little and then spend on the one thing we planned!

Let me know if you have questions. Glad to help.

Good information is given by everybody.
It should be easy if you allocate the budget to everything.

Good luck,
punitha

With both of us working convenience takes precedence over saving. But still I get a kick out of getting things for a better deal. Buying bulk is one of the saving options. I remember my Mom used to buy all the grains and pulses bulk at the beginning of the year (harvest season) at the secunderabad monda market at whole sale price. (I admit storage place might pose a problem). It used to be a whole family event for at least 2-3 days every year. That habit is still with me and when ever we visit New jersey (Oak Tree ..Apna Bazaar) I buy grocery like crazy. That came in pretty useful when price for a pound of Tur dal hit the ceiling some time back (2.99 to 3.99 / lb).....where as i paid 1.99 for 8 lb bag and bought four bags of each kind of dal (delighted me each time I went to the basement pantry to restock the kitchen ). This hunt for a good deal extends to all other areas too (clothing,furniture,electronics).

So my suggestion would be keep tight control over impulsive buying and stick to places which offer the best price.

Pushpa

Originally Posted by preetho

Hi varshini,

I joined only today in Indusladies.......glad to meet you here.......

I've got a vast experience in managing money at home......right from my childhood........

There is no big tactics...........

Every month you have to spend on all the below items without fail........ say if you are two in your family...........the cost would be the following in a metro like Chennai

Milk........................................400

Provision................................1000

House rent(if you are in a rented two bedroom flat)...................anywhere between 6000 -7500

Telephone bill........................min 600 - 1500

Cell phones.............................min 500 -1000 per person at home

Electricity bill.........................700-1500 (including A/c)

Servant maid............................400-700

Transportation ........................2500-3500 (for two bikes)

House hold expenses(like vegetable, eatables, etc)..............3000

These are my budget...........check out yours...........then you will know where you are exceeding...........

Maintain a diary, where you can have a common flow for all the 12 months.........and at the end of the year, you will know where you are going wrong

hope this is helpful to you.............

bye

preethi

HI PREETHI,

This is anu from vijayawada , yesterday only i joined in IL its good to be here as a member of IL . i gone through your tips for household expenses its good thank u for giving ideas . i liked it , from next month onwards i will try like this .i am homemaker presently ,i am in search of job if i get job my self & my husband can sahre the expenses then we can save . i have two daughters i have to save for them .one is 3years other one she is 4months .
once again thank u for u tips.

bye anu

Hi All,
Thanks for your useful inputs. It is really very useful.

these are really good inputs...i will try to use the microsoft money option and see how it works out :)...thank uuuu again

As Kanmani told in her reply in this thread, Quciken has been a big help for me in my Money management for the last 8 years
The only down side is its a best fit for US Financial Environment. In fact it helped me to not only to manage my household expences, also to budget and even to invest in Stocks, Mutual Funds etc.
I am not sure you guys can belive it or not, I am making at least $40,000.00 a year just because I am able to properly manage my money and systematically invest in the right time and right amount.
Initially, I tried to understand where the money is coming from and where its going without concerning to save it. In other words, controlling as it was at that time. Later I figured out where the un-necessary expenditure is going out, I cut my post paid cell(switched to pre-paid), made some arrangement for internet, Cable TV update what not.. I just tried to cut the out-flow without significantly. Then I started investing the excess money in short term Fixed Deposits so that I can see the money growing, then later I estimated average Monthly expences by averaging the last six months expences(it was in 1999), then I made a safe buffer of 6 months fund (in US if I lose my job, I should be able to live at least for the next 6 months safely), later I started investing the excess money after the safe fund. Then I moved 10% of money into Mutual Funds(to take small risk) later I started moving to stocks..
Its all because of the proper discipline of personal finace with a great help from the tool Quciken. Today also I spend at least 4-5 hours a week with Quciken(mostly over the weekends) and at least 20-30 min daily..
Just an idea for others