How to create a Household Budget and Save Money

Do you live paycheck to paycheck and often you ask yourself “Where does my money go every month?” ? Then it’s time to start creating a household budget and save money!

The “How-to” below will explain step by step how to create a budget for the whole family and bring your focus on where to save money.

List all your incomes

Let’s start with the shortest part of the list: the incomes.
First of all you, will need to list all your incomes, this will include your

  • wages or pension
  • tips and commissions if applicable.
  • family allowances or child benefit if applicable

In case you are self employed and earn a fluctuating amount of money per month, calculate an average of the past 12 months.

List all your expenses

Expenses are usually a longer list than the incomes and thus will be divided in multiple sections:

Housing expenses:

  • House Mortgage or Rent
  • Property Taxes
  • Condo fees or pad rentals
  • House or tenant insurance
  • Utilities (Electricity, Gas, Water, Sewer / garbage)
  • Cable 
  • Internet

Living expenses:

  • Food and Groceries
  • Personal care (e.g. hair cut, cosmetics)
  • Health, Medicals, prescription drugs
  • Baby needs
  • Clothing


  • Vehicle loan
  • Vehicle fuel
  • Vehicle insurance
  • Vehicle maintenance
  • Bus
  • Parking

Personal expenses

  • Tobacco
  • Fitness membership
  • Newspaper, magazines
  • Donations, Charity
  • Entertainment 


  • Life Insurance
  • Retirement saving plan
  • Emergency funds
  • Investment

Note: I don’t put the credit cards as a line of expense but I prefer splitting the expenses out over the real expenses they belong to.

The leftover

Make the difference between the total incomes and the expenses and then 2 scenarios can happen:

  • If the result is positive: Congratulations! You are saving money every month. You can start looking at putting these savings aside for specific purposes such as holidays, investments, etc…
  • If the result is negative, you have to start taking actions because it means you are spending more than you can afford.

Analyzing the result

There are 2 ways to tilt the result of the equation to positive; either you lower your expenses or you increase your income.

Trust me on this one, it is far easier to lower your expenses than increasing your incomes.
In case you are over spending, you need to start assessing all your expenses to find out what you can reduce. The ultimate goal is to be on the positive side of the equation above.
You will need to identify the expenses that are not necessary and assess the impact of cutting them off. You will need to ask yourself the right questions such as “do I need the $80 per month cable?”

A few tips to manage properly your budget: 

  • Set limits to some (or every) categories
  • Get the entire family to track the expenses
  • Set short term and long term goals
  • Schedule the bills due date (set reminders in your calendar)
  • Reevaluate and track your budget every month
  • Be conservative in estimates

  • And our favorite: Set Goals! Saving money for a specific goal (for instance a downpayment for a house, buying a car, a holiday trip) will help you focus and put things in perspective when deciding if you should buy this brand new 70″ TV for example 😉

Once you have put some money on the side, here are a few ideas on where to invest it: Passive Income ideas investing money

Let us know in the comment if you track your expenses and follow a budget! Don’t hesitate to reach out with any questions and subscribe to our newsletter at the bottom of the page!

How to create a Household Budget and Save Money
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