Family finances – important or not
If someone thinks that the topic of family finances plays a secondary role in creating a family, then he is deeply mistaken. No wonder psychologists call money “the third party of family relationships.” Peace and well-being in the family very often depend on the proper management of family finances. Conversely, frequent quarrels, mistrust and misunderstanding arise in families where the management of the family budget is not given due attention.
Chaotic, not commensurate with income expenses can destroy the family budget, and more and more recruited loans at huge interest rates to start a family in debt, from which it is not so easy to get out. How to avoid all this?
Living according to income
The answer to this question is simple to the point of banality – you need to live in accordance with your income. All families are very different from each other. They have different opportunities, sources of income, and different necessities of life that determine their expenses. Any family to avoid financial troubles will help the proper management of family finances. The main thing in this is to determine the family income and draw the line that cannot be crossed by expenses. Regardless of the size of the family income, planning family finances will help the family gain financial independence. It doesn’t matter how much family income you have, it matters how much money remains in your family the day before receiving the next, new income.
How to plan family finances
The time when it was believed that only stingy people count money is irretrievably a thing of the past. Not only has a new time come, but new opportunities have also appeared. Many do not think about the fact that the lack of funds can be the cause not so much of low incomes as of thoughtless expenses. In order to provide your family with a certain financial independence, you need to sit down and analyze the family budget, get rid of the spontaneity of spending and start recording all expenses. It is desirable that both spouses take part in the planning of family finances. This will help spouses avoid mistrust and various troubles related to money.
Knowing the income of the family, at the family council you should determine the amount that you can afford your family to spend during the month. All expenses must be recorded in a notebook specially allocated for this purpose. So you can clearly see all your actual expenses at the end of the month. According to statistics, people spend from ten to thirty percent of their income on completely unnecessary things, on all sorts of nonsense. At first glance, when buying all sorts of unnecessary trifles, little money is spent, but in the end they add up to large sums. When you analyze the records of your monthly expenses and see all this with your own eyes, you yourself will have a desire to reduce them as much as possible.
How to sort costs
Sorting costs by importance and urgency will help prioritize upcoming family spending. For example, their distribution into necessary (rent, groceries, car maintenance, etc.), necessary but not urgent (some savings or investments) and others (non-essential things, entertainment, travel), will help you spend family funds more thoughtfully. A clear definition of the goal and awareness of its priority can be very important when planning family finances.
This is a powerful catalyst for saving the family budget. After all, if the goal of your family is to buy an apartment or a car, then all its members will be ready to save to the maximum, and accordingly the list of expenses will be reduced. Family finances require regular and consistent planning. Only with this approach can you start saving a certain part of your income and form a family reserve fund, and in the future, capital, thereby providing your family with financial freedom.
Tagged with: Personal Finance
