| If you are going to set up a household budget, | | | | Next in line are the safety needs. These needs |
| you're going to need to prioritize your spending. | | | | include enabling you to support your family and |
| You simply cannot buy everything you want. You | | | | keep them safe. Basic expenses for |
| have to purchase the things you really need first. | | | | transportation to and from work, clothing for |
| So, how do you separate your "wants" and | | | | work, making your home and neighborhood |
| "needs" so your household budget will be | | | | secure (which include taxes), and health care are |
| successful? | | | | included here. |
| To set up a household budget you will need to do | | | | But, here is where you need to be careful. |
| three activities: | | | | Let's look at some of the household budget items |
| - List your income. | | | | included in these first two areas such as food |
| - List your expenses. | | | | (basic nutrition) and transportation to and from |
| - Set priorities and make changes so that your | | | | work. |
| income will be greater than your expenses. | | | | It is easy spend more money than is required to |
| Listing your expenses is important because it | | | | satisfy these basic needs. You may confuse |
| allows you to see where your money goes. | | | | expenses for basic necessities with money that |
| Setting priorities will help you control spending so it | | | | would contribute to recognition and self-esteem |
| is less than your income. | | | | (need levels beyond the basic levels). |
| You'll need to keep an accurate record of | | | | For example, buying nutritious groceries and |
| everything you spend. Carry a notepad with you | | | | making healthful meals at home helps fulfill your |
| so you can write down the cost and short | | | | basic physiological needs. But dining out in fine |
| description every item you buy. | | | | restaurants goes beyond the basic needs. |
| You can group individual items into categories to | | | | Frequenting fast food restaurants may be |
| make your expenses more understandable. Keep | | | | convenient, but is probably more expense than a |
| recording your expenses for a full month. | | | | simple nutritious meal at home--and fast food is |
| After a month of recording everything you | | | | likely to be much less nutritious. |
| spend, you're ready to set some priorities. This | | | | You could also consider transportation |
| means that your household budget may reduce | | | | requirements for work. There is a basic level of |
| or eliminate spending for some items in order to | | | | transportation that fulfills the requirement to |
| make your expenses come below your income. | | | | safely and reliably go between home and work. |
| It's always painful to begin cutting back. But, you | | | | And there is a more luxurious, and expensive, |
| will probably be the first to admit that your | | | | level of transportation that fulfills the self-esteem |
| spending has been somewhat out of control. | | | | needs. |
| So, are there objective ways to establish priorities | | | | In setting up a household budget you must |
| within your household budget that can help | | | | carefully consider how much to budget to satisfy |
| minimize the pain of setting spending limits? | | | | these basic physiological and safety needs. |
| === Objective Standards for Household Budget | | | | Reducing expenses for some items may be |
| === | | | | inconvenient and seem a little harsh. But, if there |
| Yes. The primary contribution of respected | | | | is money left over after satisfying these basic |
| psychologist Abraham Maslow was a hierarchy of | | | | needs, you can allocate money to other levels of |
| human needs. This prioritizing of needs can give | | | | needs. |
| you some guidance for setting your household | | | | So, let's say you do have money left over in |
| budget priorities. This hierarchy has been | | | | your household budget after estimating how much |
| described in the following form (starting with the | | | | you must spend to satisfy the needs in the first |
| most important level): | | | | two levels. |
| 1) Physiological needs (food, water, sleep, personal | | | | You can then allocate money for "Love / |
| hygiene) | | | | Belonging needs". These activities might include |
| 2) Safety needs (employment, security of | | | | family entertainment, occasional dining out, or for |
| income, protection from violence, family security, | | | | a family trip or vacation. Other items to consider |
| health) | | | | here are cable TV, Internet, and attending a |
| 3) Love / Belonging needs (friendship, family | | | | movie. You could also include magazines and |
| relationships, social networks) | | | | newspapers in this category. |
| 4) Esteem needs (recognition, self-respect, sense | | | | If you have money in your household budget left |
| of contribution) | | | | over after allocating it to this category you can |
| 5) Self-actualization (ability to use your talents, | | | | allocate money to items that fulfill the next |
| creativity, appreciate life) | | | | category. |
| === Applying The Hierarchy to Your Household | | | | When the money you can budget runs out, you |
| Budget === | | | | know that spending for items not yet covered will |
| In setting up a household budget, you should allot | | | | have to be deferred. This is the part of making a |
| money for items that satisfy the physiological and | | | | household budget that seems painful. But, it also |
| safety needs before allocating money for needs | | | | relieves you of the anxiety of wondering when |
| at other levels. Let's see how this works. | | | | the bill collector is going to call or the court is |
| The physiological needs are the most important. | | | | going issue a wage garnishment order. |
| You need food, water, sleep, and personal | | | | So, you can prioritize the items in your household |
| hygiene to survive. This helps set your household | | | | budget in a fairly objective way using Maslow's |
| budget priorities. | | | | hierarchy of human needs. Maslow's hierarchy of |
| Expenses related to these needs take first | | | | human needs will help everyone understand your |
| priority. Basic nutrition, shelter, and personal | | | | household budget, give it their support, and make |
| hygiene expenses take first place in your | | | | it successful. |
| household budget. | | | | |