1. What is a Household Budget?

A household budget is a financial plan that compares your income against your expenses over a specific period (usually monthly). It helps you understand your financial situation and make informed spending decisions.

2. How Budget Calculation Works

The calculator uses a simple formula:

Where:

• Income — All money coming in (salary, investments, etc.)
• Expenses — All money going out (bills, groceries, etc.)
• Budget — The difference between income and expenses

Interpretation: A positive result means you're spending less than you earn (surplus), while a negative result means you're spending more than you earn (deficit).

3. Importance of Budget Tracking

Details: Regular budget tracking helps prevent overspending, identifies saving opportunities, and provides financial security. It's the foundation for achieving financial goals.

4. Using the Calculator

Tips: Enter your total monthly income and expenses in dollars. For accurate results, include all sources of income and all expense categories (fixed and variable).

5. Frequently Asked Questions (FAQ)

Q1: What counts as income?
A: Include all regular income sources - salaries, bonuses, investment income, rental income, government benefits, etc.

Q2: What expenses should I include?
A: Include fixed expenses (rent, loan payments) and variable expenses (food, entertainment). Don't forget occasional expenses (car maintenance, gifts).

Q3: What's a good budget surplus?
A: Financial experts typically recommend saving 20% of your income, but any surplus is positive for financial health.

Q4: How often should I calculate my budget?
A: Monthly calculations are standard, but you might want to check more frequently when making significant financial changes.

Q5: What if I have a budget deficit?
A: Look for areas to reduce expenses or increase income. Consider consulting a financial advisor for persistent deficits.