Here and now, I’m admitting that our household does not have an operating budget. I’ve tried my hand at accounting software and recording our spending, but in the end, I’ve gone back to old habits. The fact is that I’m the one responsible for paying the bills and managing the money at our place; a position I’ve never really loved. 

Here and now, I’m admitting that our household does not have an operating budget. I’ve tried my hand at accounting software and recording our spending, but in the end, I’ve gone back to old habits. The fact is that I’m the one responsible for paying the bills and managing the money at our place; a position I’ve never really loved. 


So as we throw down the gauntlet of financial freedom, the time has come to create a budget and stick to it. This is something we all should be doing during such economic turmoil, when financial powerhouses cannot even keep track of their money. If we can’t manage our own debits and credits at home, how can we expect the big guys to do it?


According to Visa’s Practical Money Skills for Life program, only 40 percent of American’s actually use a budget to manage household finances and, conversely, 60 percent of American’s live beyond their means. There’s a correlation there that’s just too hard to miss. There’s also a lot of room for improvement.


Budgets test our belief systems as much as our wallets. Creating them might be just as hard as sticking to them. Here are some tips to get yours planned and working in your favor.


Don’t go it alone: For couples, having both spouses involved distributes accountability and relieves one spouse of all the pressure. Dina Anderson of New Haven, Conn., shares budgeting responsibilities with her husband. “We are both fair and trust each other, so it is never an issue,” says Anderson. “Since we both work full time, it all feels fair in a lot of ways that you would not traditionally expect.”


Show me the money: Start budget development by adding up all sources of income. This means salary, pensions and interest. Advisers from Practical Money Skills remind budget creators to list “take-home pay” in lieu of gross pay. Take advantage of the free advice and budgeting worksheets at www.PracticalMoneySkills.com . 


Bye-bye, baby: What comes in must go out. After you’ve listed all sources of income, jot down expenses, taking everything into consideration. For folks whose expenses vary greatly from month-to-month, take a three-month average as a working number. 


The bottom line: It’s time to total both sides of your budget and subtract your expenses from your income. Is it a positive number? If so, kudos to you, you’re living within your means. If not, the worksheet should indicate some areas where you can make changes to get you back in the black. 


According to Anderson, having control of what’s coming in and out helps relieve the stress of managing finances. I’m looking forward to that for sure.


Molly Logan Anderson is a freelance writer who lives in the western suburbs of Chicago with her husband, Mike, three kids and a black lab. Join Molly and her family on their journey of living a frugal life and making financial freedom their reality.