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September 2018

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Household Budgeting 101

Aaron Evans Aaron Evans | Articles

Read Time: 2:30 min


One of the “prerequisites” for realizing a successful financial plan is “Household Budgeting 101”.  To kick off your fall semester we are providing you with some of our favorite budgeting tips:


Work Together

If you have a family, significant other, spouse or partner in finance, be sure that everyone is a part of the process.  Getting buy-in will increase significantly your chances of budgeting success.


Organize & Categorize

If you don’t know where to get started, simply list your income and expenses for a period of time (i.e. one month or one quarter) to see where you are. Separate your expenses into needs or non-discretionary, lifestyle or discretionary, and other items which could include savings or one-time/irregular occurrences. Several tech tools are out there to help in this process including some bank/credit card sites and software tools like Mint or Mvelopes.


Set Parameters

Famed investor Warren Buffet says “If you buy things you don’t need, you will soon sell things you need.” Start with the most important items (shelter, food, clothing), then move to things that provide safety and comfort (utilities, transportation, debt-repayment) and then onto everything else. One common approach is the 50/30/20 method which suggests 50% of your take-home income be used for non-discretionary spending, 30% for lifestyle spending and the remaining 20% be used for savings/investing for goals or as a buffer for the unexpected.


Budget Every Dollar

The best budgeters will allocate every dollar coming in each month to a category, even if that category is simply adding money to your checking account.


Increase Frequency

Some budgeters find it easier to work or track shorter time periods.  If you are off-track 2½ weeks into a monthly budget, it’s easy to just throw in the towel and go wild for the rest of the month. Instead try resetting the bar every week or two weeks, giving yourself more opportunities for success and the ability to right the ship if you continue to get off track.


Stay Flexible

Budgets don’t need to be static. Summertime may have more travel, holidays can mean additional spending and snow plowing hopefully is required for only part of the year. Use the buffer in your budget to adjust for additional expenses or to increase savings in months where spending is lower.


Everyone’s goals and finances are different. Don’t be too hard on yourself or compare your budget to others. Find a system that makes sense and that keeps you engaged for the long-term.

Original content provided by Aaron R. Evans, CFA, CFP® a Senior Advisor at Strategic Financial Services. This material does not constitute the advice or recommendation of Strategic Financial services, and should not be used as the basis upon which to make investment or financial decisions. Strategic Financial Services provides advice and makes recommendations based on the specific needs and circumstances of each client. This material is not intended to provide professional tax or legal advice, which should be obtained from a certified tax professionals and licensed attorneys.

About Strategic

Founded in 1979, Strategic is a leading investment and wealth management firm managing and advising on client assets of over $1.8 billion.