We all know the importance of having a household budget.  Some people try to avoid working with the dreaded B word because they think it is similar to having their hands tied with regards to spending their hard earned money.  On the contrary, by establishing and following a simple household budget, you are essentially gaining control over your finances and freeing up money to save or invest for future growth.  If you are having trouble controlling your personal finances your first step would be to create a budget to work from.  If you are like millions of other households that have a budget in place, yet find yourself falling short each month having to dip into savings or juggle expenses, you are probably committing one of the following budget blunders.

• Spending more than you earn.  I’m sorry to say, this is a no-brainer.  If you have more money going out of your home than into it, you have a lot of work to do to shore up your financial situation.  You probably tracked your expenses when setting up your budget; it might be time to take another look at those expenses and see what you can do to cut spending.  There are always areas to trim in our daily expenses.
• Not including “irregular” expenses in your monthly budget.  You have heard it before, or perhaps you have been the one saying it, “I had an unexpected expense because my car broke down”.  Really?  Is it really unexpected to have a car requiring maintenance, sometimes not routine maintenance?  Cars are after all machines.  They will need to be fixed or maintained on occasion.  The same things apply to your furnace, your hot water heater, and your refrigerator.  By calling these expenses unexpected is really stretching the truth as we all know these things can and most likely will happen at some point in time.  A few other examples of irregular, yet expected expenses include insurance premiums, pet care, vacations, taxes, clothing, and routine medical expenses.  To have a working budget you must take all these things into consideration in addition to your monthly expenses.
• Not having an emergency fund.  Many of the items listed in the previous tip are usually categorized as emergencies.  Now that you see they are not truly unexpected expenses, it is important to have an emergency fund to cover real emergencies.  This is not limited to but can include a death in the family, severe illness, or loss of income.  An emergency fund should be established and contributed to out of your monthly budget to have a safety net when an actual emergency strikes.

When it comes to household responsibilities, establishing and following a budget might not rank in the top ten most pleasant tasks.  Regardless, it is imperative to your present and future financial well being to know what you earn, what you spend, and what you save.  While it might seem like exhausting work at first, the rewards of having your finances under control are immeasurable.