All of us maintain household budgets even if we don’t write anything down. Many people just keep track of these expenses in their head. Everyone knows how much they can spend, and pay their grocery and utility bills. One cannot avoid the process of a maintaining a budget without getting hopelessly into debt.
How do we deduce from the weekly budget what is disposable income?
First, we need to set aside what we need to pay the utility bills like water, gas and electric. In this calculation you might want to include landline and mobile telephone costs. If you have the Internet, then the cost of this will also need to be included; and don’t forget any mobile connections like a dongle for instance.
Next, one needs to decide what one spends on fuel for the car bus, taxi and train fares per week. If one drives a car, then one should also include an amount for wear and tear. This is because if you don’t take car maintenance into consideration, you’ll be caught out with unexpected repairs. Do include car insurance costs, taxes and the annual safety check.
After that calculate your home and pet insurance costs and set aside an amount for this expenditure. Remember, home insurance may have two components, brick and mortar, and contents. You may also have life or sickness insurance.
If you have children, one will need to calculate the cost of schooling, school clothes, and regular clothing including travel costs. One should not forget to add an amount for our own clothing and any work clothing we are responsible for buying.
One might need to include the costs of tools used in connection with work. This might include computers and printers. Don’t forget items like paper and inks.
Now, one will need to calculate the cost of groceries. Remember this includes much more than just food for you; there is your spouse, children and pets to consider. There are things like toilet rolls, bleach, washing powder, washing up liquid, kitchen rolls and polishes.
One will need to add an amount if one has savings, although this could be considered disposable income.
What is left in your purse after all the above items of expenditure have been taken into consideration is your disposable income. This is money you can use on yourself, or in any frivolous way without affecting the household budget or your ability to meet these costs.