GOOD READS

Building A More Realistic Household Budget

In today's cash-strapped economy, creating a strong household budget is a necessity for many families. Many people set up a budget with the hopes of reining in spending and getting their personal finances under control. They follow their budget closely for a week or two, but shortly after fall back into old habits. The key to budgeting is creating a guide that you can adhere to over a long period of time. Building a more realistic budget is easy, when you use moderation and sensibility. Here is a look at some effective techniques that allow consumers to design a more realistic budget.

Avoid Bare-Bones Budgeting
The function of a budget is to restore financial stability and control unnecessary spending. Budgets come in all shapes and sizes, and one size definitely does not fit all. When designing your budget, use moderation. Avoid budgets that allow very little to no wiggle room. While a bare-bones budget is effective at getting finances under control at first, it is not a realistic module to follow over a long period of time.

Get the Whole Family Involved
In order for a budget to succeed, it needs the support of everyone who is required to adhere to it. Discuss the need to save money and reduce spending with the family as a whole and be open to feedback. Getting the whole family involved is a must if you want your budget to succeed.

Stick to Your Shopping List
When shopping for the family, plan ahead by compiling a list of everything you need from the store, and leave off any non-essential items. While shopping, take special care that you stick to your shopping list. This method can help reduce your spending in a big way.

Don't Tempt Yourself
Impulse shopping is a sure-fire way to sabotage your budget. If you are trying to rein in spending, don't tempt yourself. Steer clear of the malls and shopping centers, and find something else to do with your time. Equally as dangerous to a household budget is online shopping. Keep your wallet or purse away from the computer, so that if you are tempted by an incredible sale online, you'll be able to think twice about your spending.

Leave the Credit Cards at Home
Some consumers have a particularly hard time with reeling in their spending. If you are among those who have an intense proclivity for shopping sprees, it may be in your best interest to leave the credit cards at home when you must go shopping. By leaving your charge card at home, you will limit the amount of money you can spend in one shopping trip, which in turn keeps your budget on track.

Opt for Home Cooked Meals
A costly habit that many families fall prey to is dining at restaurants when they are short on time. While eating out at a restaurant can be a welcoming treat every once in a while, frequent trips to the local diner can sabotage even the strongest of budgets. Rather than wasting your hard-earned money at the greasy spoon, delight in your family's company around a home cooked meal at your own kitchen table.

The Bottom Line
Building a realistic budget is easy when you know where to make the cuts. Moderation is the key when making decisions about the cuts. Don't set yourself up for failure by creating a rigid budget that is painful for all involved. When designing your household budget, get everyone involved, as you will need each other's support to achieve maximum results. Financial stability can easily be restored by making a few smart moves.



More From Investopedia

Quiz: How well do you know India's economy?

Question 1

Which of these products is India the world's largest producer of?

Poll Choice Options
  • Wheat
  • Rice
  • Milk
1
2
3
4
5
6
7
8
9
10

Latest News

  • Steady PMIs, sluggish China put brakes on European shares

    European shares edged down on Wednesday after three days of gains as data showing China's economy was still stuttering offset some broadly reassuring European purchasing manager index (PMI) numbers. Data compiler Markit's monthly PMI figures, seen as good indicators of future growth, showed that while France's economy was still a drag, Germany was continuing to power the euro zone's recovery. In Asia, China's stock markets had fallen again and the yuan tumbled to 16-month low after a survey …

  • BSE Sensex hits third consecutive record high
    BSE Sensex hits third consecutive record high

    Reuters Market Eye - The BSE Sensex and the Nifty hit record highs for the third consecutive session on Wednesday on the back of gains in blue-chip stocks. The benchmark index hits a record high of 22,901.65. ... …

  • Gold hovers near 2-1/2 month lows
    Gold hovers near 2-1/2 month lows

    Gold was steady but near its lowest in more than two months on Wednesday, with stronger equities denting the metal's safe-haven appeal and outflows from bullion funds showing weak investor appetite. Spot gold was trading flat at $1,283.50 an ounce by 0640 GMT. But if we break that level, we are going to fall to $1,250," said Yuichi Ikemizu, branch manager for Standard Bank in Tokyo. SPDR Gold Trust, the world's largest gold-backed exchange-traded fund and a good measure of investor …

  • Rupee slips below 61 against the dollar

    Mumbai, April 23 (IANS) The Indian rupee fell below 61 against a dollar for the first time in more than a month Wednesday on continued demands for the greenback from oil importers and weakness in other ... …

  • Credit Suisse upgrades Mahindra & Mahindra to 'outperform'

    Reuters Market Eye - Credit Suisse upgrades Mahindra and Mahindra to "outperform" from "neutral," saying its four-wheeler autos and commercial vehicles will benefit from even a short-lived ... …

IN-DEPTH ANALYSIS & INTERVIEWS

  • This might well be India’s biggest Ponzi scam

    It was just too good to be true. Ashok Khital, 45, displays every symptom of a man who knows he's been conned. …

  • India's star studded football league

    High and mighty including Sachin, Salman & Sun Group buy ISL teams …

  • Leaderspeak with Rajesh Janey

    Rajesh Janey, President - India & SAARC, EMC shares many firsts in his life. …

  • Seed of Doubt

    Field trials have been allowed again in India. But two decades after their global launch, genetically modified (GM) crops remain controversial. …

  • Power Hungry

    Gujarat has power round-the-clock. Most other states do not. Why this will matter in the general elections. …

  • Etcetera

    The most keenly watched contest of the current general election will be the one for the Varanasi parliamentary seat, where the Bharatiya Janata Party's prime ministerial hopeful Narendra Modi squares off ... …

  • Economy vs Democracy

    As the country gets election fever, cash comes out of mattresses and turns into liquor, gifts, and food. But it is not bad for the health of the economy, reports Sarika Malhotra from the trenches. …

MARKET MOVERS

  • Most Actives
    Most Actives
    NamePriceChange% Chg
    16.72-0.13-0.77%
    UNITECH.BO
    14.42-0.16-1.10%
    SUZLON.BO
    120.80+7.40+6.53%
    FRL.BO
    69.10+7.15+11.54%
    MANGCHEM.BO
    54.45+1.70+3.22%
    HCLINFO.BO
  • Price % Gainers
    Price % Gainers
    NamePriceChange% Chg
    16.20+2.70+20.00%
    JAGSONPH.BO
    52.15+7.55+16.93%
    RUSHIL.BO
    14.80+2.01+15.72%
    SOUTHPET.BO
    23.00+2.65+13.02%
    KILITCHD.BO
    23.50+2.60+12.44%
    NELCAST.BO
  • Price % Losers
    Price % Losers
    NamePriceChange% Chg
    -10.95-100.00%
    4THGEN.BO
    -17.30-100.00%
    ALFAICA.BO
    -16.81-100.00%
    AMAL.BO
    -11.73-100.00%
    BORAX.BO
    -29.95-100.00%
    BRADYM.BO
  •  
    Recent Quotes
    Symbol Price Change % ChgChart 
    Your most recently viewed tickers will automatically show up here if you type a ticker in the "Enter symbol/company" at the bottom of this module.
    You need to enable your browser cookies to view your most recent quotes.
  • Recent Quotes News

    •  
      Sign-in to view quotes in your portfolios.