Monthly Budget Calculator

First of all, What Is A Monthly Household Budget?

A household budget is a work of dividing the income and deciding the methods of expenditure.

It is basically a plan of how you spend your income on various needs and wants in life.

Your budget is a system, a plan, and more accurately it’s a financial discipline. When there is a budget, there is a system which brings orderliness in your life. With this common understanding between members of a family forms a bond of union, and each feels a greater pleasure and pride in doing his/her part.

A Household Budget is important. In most families there is a fairly definite income. 50 years ago things cost less and incomes were less, today the incomes have increased and cost of living is growing higher. The cost of living and standard of living depends on the ratio between income and one’s methods of expenditures.

A Household Budget consists of 5 Main Factors –

1. Expenditure on Food

2. Expenditure on Shelter

3. Operating Expenses – includes rent, electricity bill, water bill, home repairs etc.

4. Expenditure on Clothing

5. The Higher Life – includes expenditure incurred on recreational activities, social clubs, travel, vacation, movies etc.

So, the key factors in a household budget can be described as FROCH

F  Food

R  Rent

O  Operating expenses - Fuel, Electricity, Water, etc.

C  Clothes

H  Higher Life - Books, Travel, Charity, Savings, Insurance

Our Monthly Budget Calculator is a detailed breakup of the 5 factors mentioned above. It will help you in understanding where and how you are spending your money.

Should You Make A Monthly Budget? What Benefits Does It Have?

► It gives you better control over your money – you will be able to realize where and how much of your money is being spent, what expenses you need to cut down, etc.

► Helps you in staying focused on your financial goals.

► Helps you avoid making impulsive or emotional purchases – when you’ve got a monthly budget in place, you will be less prone to make purchases on a whim as you would be aware of your financial limits.

► Helps you eliminate unnecessary expenses such as late fees/penalties/interests – when you plan a monthly budget, you are made aware of any unwanted expenses such as late fees/penalties/interests regarding which you were not aware previously and are able to cut them down efficiently.

► Helps you save money for emergency situations – By making a monthly budget, you can set aside a certain percentage of your income for unexpected emergency expenses.

► Helps you determine if you can afford a loan now or in near future.

► It will make your kids more financially educated – If you are a parent, you can involve your children in the process of making of a monthly budget. As they engage in this process, they will feel a sense of responsibility and will be able to understand how to manage their own finances in a wise manner.

How Your Monthly Budget is Directly Associated with the Loan You Require –

Lenders look for your repayment capacity as one of the major deciding factors in loan approval.

If you are in need of a loan or planning for a loan in future, check out whether your budget is lender-friendly or you need to adjust it according to lenders’ eligibility criteria.

Work out with your parents/partner a budget or schedule of probable household expenditures for your home for the next month; the next year and adjust it as and when required.

Remember, your household budget consists of both Cost of Living and Standards of Living - one is need, other is luxury. Manage them effectively.

How To Use Monthly Budget Calculator –

Just input the monthly incomes and monthly expenses incurred by you under the various categories and see the result. It will help you know your total expenses in a month and how much money in-hand is left after subtracting all expenses.

Benefits of Monthly Budget Calculator –

✧ Know where and how much you are spending

✧ Understand where you need to save more

✧ Understand whether some of your spendings are impulsive

✧ It helps you to clearly distinguish between spending and investing

✧ Helps you in achieving your financial goals

✧ Helps you determine what definite aims should be in your mind in dividing the income?

✧ Your budget must be in accordance to your financial goals both-short term and long term.

✧ If your income varies from month to month, then monthly budget calculator will be very useful for you.

By using Monthly Budget Calculator, you can check for yourself or any of your family members/friends/colleagues.