In our SkillBite, Your Household Budget: Juggling Finances on the Home Front, Laura Stock, MBA, CSP explains some ways to learn how to successfully stay on top of your home finances. If you’re wondering how to develop skills that will allow you to get a better grasp on your budget, Laura provides pointers on:

Budgeting Basics

Laura explains that to develop skills for budgeting your income, you must get the most out of your limited supply of time. “The true secret to achieving overall productivity,” she says, “lies in constructing a decent work/life balance, one that gives you reasons to work hard, while simultaneously providing a solid basis on which to build your professional life.”

Developing skills for financial independence requires a firm effort, as if you end up jumping off the fiscal rails, it could take years to work your way out of debt.

The basic math she says is:

Household Income – Household Expenses = Household Savings

One of the easiest ways to learn budgeting is to separate your expenses into two categories: fixed mandatory and flexible mandatory.

Flexible Mandatory are things like:

Pet Costs
Utility Bills
Credit Card Bills
Groceries
Expenses needed to maintain a healthy lifestyle

These are where you must make certain assumptions while preparing for your budget. Laura explains to set a “buffer” that represents the maximum you’ve ever spent on each item, and build it into your financial plan.

While Fixed Mandatory are things like:

Car Payments
Mortgage Payments
School Tuition
Property Tax
Childcare

These costs may fluctuate over time, but you know what to expect month-to-month.

Live Within Your Means

When developing skills that have to do with your budgeting, you must learn how to take charge of your spending habits. It’s important to remember that little things add up, and if need be, carefully review your credit cards to identify the places where you can trim costs down, in need be.

Budgeting for Unexpected Expenses

One of the hardest parts of developing skills to improve your budgeting is preparing. Preparing should be an expense every paycheck, and it’s difficult to save this money if you’re spending habits are out of whack. Laura explains that you should prepare for ‘surprise expenses’ such as:

Car repairs
Appliance repairs
Home repairs
Medical bills
Emergency Travel

Get Ahead of the Game

There are many ways to learn how to develop skills to improve your household budgeting, and in order to have a good financial grasp, you must focus “like a laser” on sticking to this plan. This budget plan should be easy for you to understand and communicate with to your significant other, or major partners in the family. As for savings, flexibility is key. Have rules for your budget, and ALWAYS know how much money you have available at all times.

SkillBites is an online resource to assist people develop skills, both in their business life and personal life. Developing skills is made easy with SkillBites, as each ‘How-To’ eBook provides only the essential facts that can be digested and retained within 20 minutes. For more information, visit: www.skillbites.net.