Your Household Budget: Don't Forget your Semi-Annual Checkup
By Michelle P. Sharrow, MBA

Household budgets are meant to be living documents. Only when regularly used and updated, will you reap all of the benefits of having one. While you should be modifying and tweaking your budget every month for minor fluctuations in your income and bill balances, half way through the year is a perfect time for you to give it a complete once over and if necessary an overhaul. Here is how I go about making adjustments to mine.

Clean it Up

First things first. Are there creditors and debtors that you no longer owe? Have any of their names changed? Clean up your budget sheet by deleting unnecessary creditors and inaccurate names. Are there any new creditors that you haven't added? Add them now. Are there any expenses that aren't truly captured in your budget. For instance, do you truly have a line item allocated for groceries and toiletries? Even if you use two different bank accounts for your mortgage and incidental living expenses, your budget will only truly work if you lay out every single expense that you occur on a regular basis, regardless of which account you pay it from. Often times small yet regularly occurring expenses are the ones that keep us from having a balanced budget each month.

Next, start at the top with your salary and income. Is your salary and income category accurate? Did you get a pay increase or cost of living adjustment that you forgot to add in? If so, make sure you change it immediately.

Evaluate It

What about the placeholder amounts that you plug in for the bills that fluctuate each month? Mainly, I am speaking of your electric and gas bills if you are not on a budget plan. Did you overestimate how much it was going to cost you to heat, cool or power your home? If so, fix those amounts so that your bottom line will more accurately reflect what you have left after all of your bills are paid.

Finally, if you are using a spreadsheet that automatically calculates the totals, check to be sure that everything that you have listed is being included in that total figure.

Up Your Savings

Now after going line by line and making these changes, the hardest yet most critical thing to do is to consider how much you are saving and whether the adjustments that you have made allow you to increase it. If so consider, having this money directly allocated to your savings account via direct deposit to ensure that you are not tempted to waste it on unnecessary stuff.

Your household budget is one of the most important documents that you'll touch on a monthly basis. Revisiting it regularly is the best way to ensure that it is working for you and that you aren't throwing away your hard earned money. If you are looking for ideas on how to put your budget together try the ones offered at daveramsey.com, Kiplinger.com, or consider the off the shelf products such as Quicken.

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Michelle is a freelance writer based in Waldorf, Maryland. Her areas of expertise include finances and parenting. .

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