Pet Care Credit

One of the most frequently asked questions about money management is how to develop a household budget that works. Far too often, people wait until they are in financial trouble before they start thinking about budgeting. Either they get laid off or they find themselves dealing with a large unplanned expense. Either way, a household budget could have helped.

Evaluating your cash inflows and outflows on a monthly basis seems to be the best and simplest way to get a handle on your finances.

Your first step is to figure out your monthly income after taxes. This is the "net" amount deposited into your bank account. If your income varies, calculate the average of your net income over the last 3 months. And don't forget to add savings account interest here too - every penny counts.

Then make a list of your fixed monthly expenses - meaning you pay the same amount towards them each month. That may include: housing (mortgage or rent), car payments, credit card and school loan payments, phone, cell phone, cable TV, satellite radio, child care - all of it. Don't forget to list the bills that come quarterly, annually, or semiannually.

Now you should have two columns: one for net income and one for fixed monthly expenses. But you're not ready to compare the two against each other just yet. There's still more calculating to do.

For now it's time to account for all the variable expenses you have each month: dry cleaning, personal care, groceries, medical costs, pet care, entertainment, gifts, and anything .