A few days before the payday, a lot of families discovers that all sorts of money have suddenly run out, with the exception of funds for travel. The whole paradox of the situation, as a rule, lies in the fact that both the husband and the wife can earn quite decently, but there is still not enough money.
What to do?
A detailed accounting of finances can help. This means – planning and subsequent compliance with the family budget.
A family budget is a difference between all the income and expenses of your family. In its simplest form, this is a financial plan including a list of the income rate and expenses with established restrictions for a certain period in the future.
The main task in drawing up the family budget is to correctly distribute the expected income for the future period into various expenditure items: mandatory bills and expenses, food, clothing, transport, entertainment, investments, etc.
The purpose of drawing up the family budget is to control over the financial situation of the family, the achievement of the financial goals (apartment, car, education of children, pension, rest), reduction of unplanned and unnecessary expenses, conscious planning of future purchases, the formation of internal financial discipline. In the end, it will become clear to you where your money comes from, how much is it, and what you spend it on.
- First, you need to have a clear idea of your income. Moreover, it is desirable to do it not only for a month but also to try to calculate the whole year. Record all your sources of income. If you work extra or have any external sources of income, be sure to write them as well.
- Make a list of monthly expenses. You must clearly imagine your expenses. Not only for a month, but also for periods of up to a year or more. This is important for the home budget. All major expenses need to be planned in advance. They can be evenly distributed over time, without diverting large amounts of monthly income.
- Make a list of all the expected expenses that you plan during the month. It includes loan payment, car payments, car insurance, food, household expenses, entertainment, reserve or savings.
- Expenses are divided into two categories: fixed and variable.
- Fixed expenses are those that you pay every month in any way. For example, loan or rent, utility payments, the Internet, and so on. These costs are for the most part substantial.
- Variable expenses are expenses that will change from month to month and include items such as food, gasoline, entertainment, food courts and gifts.
- Calculate your monthly income and monthly expenses. If you end up with more revenue, you are on the right track. This means that you can allocate excess funds to the most required items of your budget, such as savings or overpayment on a loan, to pay off the debt more quickly. If it turns out that expenses are more revenue, it means that you need to make some changes.
If expenses have exceeded your income, then it is necessary to pay attention primarily to variable expenses in order to find ways to reduce them. Since these costs are usually substantial, it should be easy to cut a few dollars in a few positions in order to bring you closer to equality of income and expenses.
Enter the rule to control your family budget all the time. It is important to keep your budget on a regular basis to make sure that you keep the lights on. After the first month has passed, find a minute to sit down and compare actual costs against what you have planned in the budget. This will show you where you have succeeded and where you may need to control the budget.
You can make a rule of “daily family budget.” Divide the amount allocated by the month by the number of days in the month. For example, you can spend a certain amount per day. The only thing is, do not try to save on everything. Never save on good nutrition, rest and education.
In general, when maintaining a family budget, it is important to follow, first of all, such rules:
- carefully record all expenses for the month. After analyzing them, you will be able to understand what expenses can be reduced, and postpone the available money for a vacation or a major purchase.
- plan absolutely all purchases. This applies to large purchases such as household chemicals or hygiene products.
- leave a certain amount for unforeseen expenses. Do not go crazy on the ground of economy and refuse entertainment and trips to the cafe. Everything should be done in moderation.
- enlist the support of all family members. All family members must agree with you. Otherwise, nothing happens in a proper way.
- set a goal. For some people, regular budget planning may seem boring and tedious, but if you see a big goal ahead of you – buying an apartment, a car, or accumulating start-up capital, it will be much easier to get involved in the routine process of recording expenses and expenses.
It is worth noting that now there are many electronic programs for managing the family budget. Personal finance accounting software can be downloaded online.
When choosing a program, pay attention to its ease of use, the ability to receive reports for a specific period, and the ability to archive data. As a result, the information on loan repayments and the dynamics of changes in profitability of various financial tools will always be within reach.
Programs help you keep records of income and expenses, plan costs, make detailed reports on the state of the budget, and even draw charts. They provide subcategories (products, clothing, restaurants, etc.), allowing to keep separate records for each type of cost. At the end of the month, a family can not only sum up expenses but see which specific goods and services require the most money.
Category: General Issues
Tags: Business, financial