Do you know how your household budget is spent?  People do not have an infinite amount of money, so they have to prioritise how they spend their household budget.   This means every household has to decide what they consider the most important and this is where their money is spent first.  Typically, in a household budget this is the mortgage/rent, light and heat, food and transport.   The household expenditure can be divided into three types, fixed, irregular and discretionary.

Fixed expenses are the bills that have fixed due dates and fixed amount.  Bills such as Mortgage repayments, Rent, loan repayments, car tax, car and house insurance, life assurance and TV Licence are examples of fixed expenses.  These are an easier type of bill to budget for.

Irregular expenses are the bills that have fixed due dates but the amount due will vary each time the bills issue.   Bills such as Electricity, Telephone, Heating, Petrol, car maintenance, grocery shopping. Although more difficult to budget for, these bills should be allocated an estimated amount in the household budget and can be adjusted for as each bill is paid

Discretionary expenditure is what the name suggests, optional or flexible expenditure.  These bills are dependent on the wants or wishes of the household.  These include holidays, entertainment, hobbies and clothing.  These bills should be included in the household budget.  They should be allocated a set amount and this figure should be adhered to.

Ideally all discretionary expenditure should be planned spending as opposed to impulse buying.  Impulse buying is where a person spends money on the spot without prior thought or planning and is dangerous as you could be spending money that should be used to pay an important bill.  Knowing what the expenditure in your household is vital to taking control of your money.  This enables you to make informed decisions on discretionary expenses.

It is easy to set out a household budget and there are plenty of places to get help if you are unsure how to start.  Try www.billsmanager.com which will show you step by step and will keep your household budget up to date.