What should be considered when planning a household budget?

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Anyone who wants to get started with the household budget will likely ask the question, what should be considered when planning a household budget?

Budgeting is not something most people find easy to do. It is one of those things that is very simple but not easy.

There are a lot of things that need to be put into consideration when planning a household budget.

Budgeting is a very important part of money management for a healthy financial life.

Just the way a country or an organisation plan their expenditure and income, it is also important at household or individual level to plan your finances.

I must admit that I do not budget our household money to the pence’s. The two most important elements in budgeting are expenses and income. Both of these are very important.


Most people don’t think about income when they are considering budgeting.

The idea behind budgeting is to know where your money goes. As important as it is to know what you will spend your money on, it is also very pertinent to know where the money you will spend will come from.

Regardless of the number of income stream you have, part of your budgeting should include your source of income.

Perhaps the amount of money you earn is not enough to fund your lifestyle.

Budgeting will help you to be able to see the clear picture and that will encourage you to think about increasing your income.

I have created a tool on this website that you can use to calculate your outgoings and income; you will then be able to see how much you have left.

Click here to take advantage of our Household Budget Calculator

The major thing here to consider is how much do you earn and what is the frequency in terms of weekly, bi-weekly, monthly etc

Depending on if you are an individual or couple. If you are a couple do you combine your income or do you separately contribute to a pot to meet your household expenses?

Are there other sources of income like side hustle or overtime.

It’s important to be careful with overtime pay in budgeting. This is because it’s not a fixed income and can vary.

There is other income like Child Benefit in the UK. If you are reading from the outside the UK, consider if there is anything like that in your country.


How much you spend on various essentials and non-essentials is what form your expenses. The essential needs of every human are food and shelter.

No one wants to go about naked so clothing is also essential.

As we now live in the modern world, everyone will agree that if you live in a city or town, you possibly need transportation to move from point A to point B.

There are a whole lot of other things that we need because of modernisation. One of those needs is the telecommunication which can include a mobile phone with internet.

The list of our expenses can grow very quickly if we are not careful.

I think the most important thing here is to separate your need from wants.

Most people in the developed world have enough to meet their needs but want is the major problem many people battle with.

Below are the important expenses you need to consider in your budget planning.

Mortgage or Rent

Everyone needs a roof over their head.

This is one of the absolute essentials that anyone will pay for and a large percentage of the majority of the population income goes towards paying for accommodation.

There is always a debate about should you buy a house or rent one.

That is not the topic I am dealing with here.

As regards budgeting, you will need to consider how much you need to set aside to pay for your accommodation cost.

Food/ Groceries and Eating Out

One of the essentials we cannot all do without as human is food.

When budgeting you have to consider how much you want to dedicate for your groceries shopping. The average household in the UK spends around £60.60 per week on food.

Food is one of the items on our budget we spend the most money on. Apart from accommodation, food is perhaps taking the second largest percentage of our income. 

I am a fan of cooking at home. However, sometimes it’s nice to eat out because you can leverage someone else time to do the work of cooking for you.

I know eating out is expensive but it will not cause any harm to anyone’s budget if it is done in moderation. 

Emergency Fund and Unforeseen Expenses

Life can happen to anyone at any time.

This is the reason why it is important to budget for unforeseen expenses. This is what is generally regarded as an emergency fund.

I remember one time when there was a strong wind which blew away the ridge tiles on the roof of our house. While we had insurance, we end up paying for the repair ourself.

The insurance came to assess the damage. The cost of the repair was around £304 when the insurance company assess the damage. Our excess was £300.

This simply means we were only going to get £4 from the insurance company. It just didn’t worth it for us to claim so we decided not to claim and we paid for the repair from our pocket.

This is an example of things that could happen without you planning for them. This is why you need to consider emergency fund in your budget.

Car Expenses

The cost of running a car can really add up.

According to figures from a research done by Motoring Research, the average UK motorist spends at least £162 on car costs every month.

This figure does not include the cost of financing for people who bought their car through car loan or financing payment.

The cost of maintaining a car is something you do not want to miss out in your budget.

Obvious you have to put fuel in the car for it to run except if your car is electric. Even for electric cars, charging it will still cost some money but might not be as expensive as petrol or diesel engine car.

Some people pay to park in their workplace. And most of us do have those times when we find ourself in a place where there is no free parking.

You need to budget for parking cost as part of the cost for running your car.

Entertainment and Subscriptions

We human being can survive without entertainment.

However, we are no longer living in the cave, we have evolved as a species and we are now in the 21st century.

Majority of us need to entertain ourselves.

Whether going to the cinema, festivals, live sport etc. All these will cost money and it is important to consider these costs in your budget.

I have had a wonderful time with my family visiting a lot of nice places in the UK including watching some of my favourite football teams life.

If you like outdoor or going to see things and places you need to consider what this will cost you in your household budget.

Perhaps you like to spend money intentionally and be wise with money.

This does not mean that you cannot have times when you can put your fit-up and enjoy a nice documentary or movie on Netflix.

We have Netflix subscription in my house, the kids love it because they do watch a lot of educational programmes on it. I am not a fan of movies but I enjoy good documentaries on NetFlix.

There are other ones like Now TV and Amazon Prime Subscription for their TV and Video.

Some people do have gym membership or magazines they subscribed to. Remember to include the cost of these subscriptions in your household budget.


We all have a lot of loved ones in our life. Most of these people play important roles in our life.

It could be your wife, husband, partner, brother, sister, friend. The list is endless.

Throughout the year, you will give gifts without taking notice because these birthdays come at various times of the year.

Majority of us don’t include these costs in our budget.

It is important you consider this in your budget because these small costs can quickly add up.

If you have children, the cost can be higher because your children will have their friends from school invite them to a birthday party.

Our boys do attend a minimum of 10 birthday parties in a year when they go for these birthdays they have to go with a gift.

Obviously, you won’t attend all birthdays or give gifts to everyone celebrating a birthday. However, you will not ignore all of them so consider birthday gifts in your household budget.

Holiday Gifts

The busiest time of the year is the holiday period which is mainly known for Christmas.

I love Christmas time because of its significance in terms of celebrating the birth of Jesus. However, Christmas has been commercialised over the years which makes it very expensive for many households.

The holiday period is the period where you have to watch your spending.

The best way to not overspend during the holiday period is to have a strict budget beforehand for the maximum you will no go over.

By considering holiday gifts in your household budget, you will be avoiding digging a hole in your finance which you will be running around to fill after the holiday and Christmas is gone.

Charitable Contributions

A big part of my philosophy of life is generosity.

There are people in life which through no fault of their own can not provide for their daily essential needs.

Such people need help and I believe anyone who has a job or any form of income is among the most privileged people on earth.

I count myself privileged to have income.

Giving to other people in need from my income is something I have done for a number of years. I regularly have generosity and charity as part of my budget.

I am a Christian and Christianity suggest 10% of one’s income.

I would recommend 10% which is what I also follow but people who are struggling should not think it’s compulsory to give 10% to church or charity.

The most important thing here is that if you have regular income there is a power in the universe that give back to you when you give to people who are less privilege than you.

I do consider 10% of my income in our household budget as a contribution to the church.

Our church does use this money wisely to run the church and also give to the charities our church support.

Other costs


Are you a member of any organisation which you pay monthly or annual fees.

It might be an old student association or a professional association.

Some employment pay for their employee’s professional association membership fee.

For most people, they will need to take care of the payment themselves. Don’t forget to consider any membership cost in your budget.


Health cost is generally free in the UK.

However, prescriptions are not free for everyone.

Children under a certain age and older people in a certain age category have prescription free. I think pregnant women also have prescription free.

People who are on some particular type of benefits might also be getting prescription free.

For the majority of people, unfortunately, have to pay for the prescription.

If you are on a particular medication, the cost of your regular prescription you get from the pharmacy needs to be considered in your budget.

Work Wardrobe and Upkeep

Most people don’t take notice of how much they spend on clothing.

According to the Family Spending report from the Office of National Statistics, the average person spends £43.88 on clothes each month. The average person in the UK spends at least £526.50 on clothes annually.

This is the reason why the fashion industry is a multimillion-pound industry.

When you are planning your budget it is important you consider how much you will spend on clothes, shoes and other accessories.

I am not against buying designer cloth or shoes as long as it’s not too expensive.

I am not particularly loyal to any brand. I just go for quality because there is no point buying something cheap and quickly need to replace it after one wash.

I generally buy from outlet stores where some of the big brands have shop and sell their items at a reduced price.


The expenses that come from entertaining guests in your house can add up without you noticing it.

As an immigrant, I was raised in a household where there were a lot of people and also we welcome guest throughout the year. All our guests need to be entertained and looked after.

As I am far away from home, we still have people who visit us from Nigeria and other family members who live in other parts of the world. At least ones in a year we do have a family member visit us.

Taking our guests out to see tourist attractions and important places in our area can cost money. Their time with us for times ranging from 1 week to 4weeks can have an impact on our finances.

We do it in joy and happiness because we love welcoming people to our house. You might have people who regularly visit you, so you need to consider these expenses in your budget.

Travel and Holiday Expenses

As a first-generation immigrant in the UK, travelling abroad on holiday wasn’t something I used to do while growing up in Nigeria.

I am fascinated by how people take holiday and travelling seriously in the west.

I now understand the importance of travelling on holiday.

Travelling and holiday are not only good for recreation and relaxation. Travelling is very good for experiencing other culture of the world.

The world is so big and as much as possible it is good to experience a different part of the world. Travelling I have found out help to unlock the creativity inside us.

If all you see is your little place where you live you might not be open to a lot of other ideas that can be inspired by seeing another environment, people and culture. 

Holiday doesn’t have to be abroad. Each country of the world has a lot of nice places that can be explored by the citizen of that country.

We do enjoy exploring beautiful spots close to where we live. We particularly love the Cotswold. See my article about Why is Bibury famous?

In my household, we always have travelling and holiday in our budget. It is an important element of our budget.

Pet Care

Pets are lovely to have in the house if you can afford the cost and the work involve to look after them.

We have two goldfishes in my household.

The cost of taking care of them is not that much compared to say a dog or cat. Since we had them we haven’t spent any serious money other than the time to constantly clean the tank.

If you have a dog or cat, you might need to take them to a vet and the cost can add up. If you have a pet, consider the cost of their care in your budget.


The cost of visiting the dentist is one of those costs that most people don’t remember when they are considering items to have in their budget.

I remember visiting the dentist to take out one of my wisdom teeth.

If I remember very well, the cost was over £50. You might need hygienist to look after your teeth at the dentist. basically, every of your visit to the dentist we possibly cost some money.

The cost of a hospital visit in the UK is mainly free but dental care is not free in the UK. Children under a certain age can go to the dentist free.


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