Many, many personal finance books and guides love to discuss the process of assembling a household budget, and for good reason: a household budget can be an extremely powerful tool for setting personal finance goals and achieving them while also providing a great “big picture” view of your spending.
These guides are great for the purposes of teaching you how to make a budget, but they miss out on the why. Why is a budget worth all of the work that you put into it? How do you create a budget? What good is the exercise of building a personal or household budget?
Why should you make a household budget?
Most of us have seen a budget in some form or another. It’s a listing of a bunch of different categories, along with the amount you intend to spend on each of those categories. In theory, every dollar you spend falls into one of those categories. At the bottom, the dollar amounts are totaled, and that total amount should add up to the money you bring home … Read More