Creating a household budget:
The most important points

Date: July 11, 2022

Before you start planning a budget for your family

What is a household budget?

In a household budget, incomes are juxtaposed with planned expenses in order to achieve a better distribution and reach savings targets. It's very simple. To do so, you need to track or plan your expenses consistently with an app or even the traditional way with a pencil and paper.

How to prepare a household budget

Plan your budget in just a few steps:

1. List your expenses
   Make a list of all recurring costs. These can include things like insurance premiums, public transportation passes, and even taxes. Space should also be made on this list for expenses for leisure activities like museum visits and restaurant meals.
   
2. Compare income and expenses
   Now, make a list of your sources of income. These can include salaries, assets, or pensions. Then, juxtapose your income and expenses.
   
3. Monitor your budget
   In the next step, subtract all expenses from your income. How much money is left at the end of the month? You will benefit the most if you do not gloss over anything and are honest with yourself. If you find yourself in negative territory or if the budget is only balanced by a narrow margin, adjustments are a good idea. This is particularly true if you want to reach specific savings targets or invest more in your pension.
4. Include a buffer
   No budget is complete without safeguards. Reserve enough money for unforeseen expenses in your plans. By doing so, you ensure that a forgotten bill or an accident will not derail you financially at the same time.

Tip: Try out some of the many online templates and budget calculators, which can help with your household budget. Try these out to find the solution that works best for you.

What are the advantages of family budget planning?

Maintaining a household budget allows you to gain more control over your own finances. This creates more security as well as greater freedom with regard to expenses over the long term. Planning a dream vacation or hoping to fulfill a long-held wish? The benefits are then twofold: Setting priorities and maximizing your savings potential will also bring you a little closer to your goals one day at a time. 

What are some potential obstacles when maintaining a household budget?

As you may have already guessed, the preparation of a household budget is not an end in itself. Long-term goals require consistent bookkeeping. The good news is that with time, any practice can become a habit. What are you waiting for? Pick up your pen and get started!