Household Budget Calculator Basics

You can use this simple household budget calculator as a tool to determine if you are spending more than you earn. Most consumers “know” whether they are spending more than the earn, particularly as the end of the month approaches. But, “knowing” does not necessarily mean “understanding” where all the money goes and how best to adjust spending to make things better. Using this budget calculator is designed to give you a clear view of your monthly finances and help you find places to change your budget to make the most of your income.

How To Use This Budget Calculator

The budget calculator shows the percentage each expense category relative to total available income. The higher the percentage of the expense category, the higher the importance you assign to that category of spending. Generally your spending can be classified as either non-discretionary (housing/rent) and discretionary (entertainment). If you have a goal to save for the down payment for a home, the calculator will show you where you can consider making adjustments to your expenses so that you can reach that goal.

At the end, this household budget calculator is just a tool that reflects your current spending priorities. But, it is not permanent, and is subject to adjustments as your life and priorities change.

Whether you are a household of one (personal) or of many (family), to create a working budget using this calculator is easy. You simply provide the values to project your total income and estimated household expenses. As you enter the values, the budget calculator automaticlly does the calculations and provides a category and summary breakdown of the results. That’s all there is to it. The more accurate the values, the more accurate will be your household budget. Review at the end of the first month versus your actual spending and make adjustments. Continue refining your budget as your personal life changes.

Managing Your Household Finances

Disciplined And Organized

You need to be disciplined and organized to manage your household finances. Few consumers follow the basic principles of financial management. That is why so many people suffer from problems of consumer debt.

Here are the basic skills you need to manage your household finances successfully:

Household Budget

Use this budget calculator to learn where you are spending your income and where you can reasonably cut back.


Your household budget needs to account for savings. You need to have a reserve of money for emergencies, major purchases and retirement. Use our savings calculator to determine how much you need to save and over what period of time.


With your budget and savings goals determined, you need to make sure you stick to them. Tracking your expenses is the only way to ensure that your financial plans are being followed. Your bank and credit card statements will provide you with non-cash transactions data. Do a daily record of your cash spending to track your household expenses. At the end of the month use your budget calculator to do a comparison.


Save receipts. This will help you note if there is any discrepancy between what you think you paid and what you were charged. Saving receipts is the best way to make sure you have a legitimate way to dispute a charge if needed.

Everyone Is Responsible

Everyone in the household is responsible and benefits if your finances are in line with the budget. Make sure all are aware of why there is a household budget, its importance and priorities, particularly children. This will help their understanding of the importance of financial discipline and savings and make managing to the budget easier for you. Everyone needs to understand why the answer sometimes needs to be “no we can’t afford it”.


Discretionary Versus Non-Discretionary

Discretionary | Non-Discretionary Budget Expenses

As you review your household budget calculator, you will need to identify expenses that are discretionary versus non-discretionary. Some expenses are necessary, such as your rent, mortgage and utilities; while others are non-essential purchases, such as your entertainment or dining out. When there is the need to reduce your spending, you should prioritize your discretionary expenses.

One way of thinking of the difference between discretionary and non-discretionary expenses is viewing the categories as “wants” compared to “needs.”

Non-Discretionary Expenses

This is mandatory spending that you have little control and basic to functioning in society. These are basic “needs” such as housing, utilities and basic living expenses.

  • Living Expenses – Rent, groceries, utilities, gas, etc.
  • Loan Debt Payments – Mortgage, auto loan, credit cards.
  • Taxes – Federal, state income, local property.
  • Insurance | Health Care – Increasingly important for growing families and as one ages.
Discretionary Expenses

These are optional spending that reflect your lifestyle, or your “wants.” These are not a basic need and would be reduced or eliminated if required.

  • Entertainment – Sports, hobbies, membership clubs, etc.
  • Travel – Whether a short visit or a dream vacation, costs add up.
  • Luxuries – Restaurants, alcohol, tobacco, etc.

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