What your household budget should include
(and what it shouldn't)

So you want to work out what your household budget should include and what it shouldn't? With a set allowance each month to run the home, one of the benefits of having a budget is that you can separate out individual elements and then concentrate on keeping within the allowances you have set.

A budget for the household should be just that, an allowance to spend on household items and nothing else.

When you have a set allowance to run your home budget the secret is to monitor everything you spend during the month and not miss a single item. The purpose here is to maintain control over everything involved with running the household during the month, leaving out things like your mortgage repayment or social events.

Focus on your household and make it completely separate from every other element of your complete family budget.

To clarify this, let's take a look at the essential elements of a normal monthly household budget to keep you on track.

• The first item that springs to mind is food and household shopping.  This is where you include what you spend on groceries, meat, cleaning products and anything else that you consume during the month.
• Bills. Every month there are bills to pay and if you have completed your total budget correctly you can use the amount you have previously calculated. (Remember where you wrote down every single item you purchased and every single payment you made during the month?  This is where having accurate details really counts).
• Family trips and entertainment.  Don't forget about family activities like going to the movies or planned visits to amusement parks etc.
• Day-to-day travel expenses. Include all of your public transport costs or, if you drive, the amount you spend on petrol.
• Children's clothing and school equipment. It's surprising how much it costs to provide for children's needs. Make sure you consider all of their needs including stationery, books, sporting equipment and clothing.

So now you have a clear idea about what you should include in your household budget, how about the things you can leave out at this stage? Basically, this is where we remove ongoing monthly expenses before the monthly allowance is determined or special one-off costs.

• Monthly savings. Savings do not have to be included in a household allowance because you are not actually spending this money. Savings are what you can separate from your income before you set your monthly household expenses.
• Debt repayments. Things like car loans or any other debts on which you have to make regular monthly repayments should have been taken into account in your overall budget before setting your monthly allowance.
• Taxation and other expenses. Some things like car servicing, tax and MOT costs do not form part of a household allowance and could be budgeted for separately.
• Mortgage repayments and rent should also be excluded from your household allowance because these are regular payments that must be made before you determine what is left for your household allowance.
• Social events could also be excluded because they are irregular activities that should be budgeted for separately.
• Major events like Christmas, holidays or birthday presents should all be separated from your household budget and be the subject of their own separate budgets.
• Special planned purchases like television sets or entertainment systems also require their own individual budget and can be excluded from your household expenses.

Once you have established your budget, the important thing is to monitor every item you purchased during the month and keep accurate records. By having a complete picture of your spending patterns you are in a great position to maintain control.

It goes without saying that you should always check your budget with your partner to make sure you haven't missed anything out and to prevent any future arguments or misunderstandings about who is responsible for paying individual items in the household budget.