Bringing family finances to fruition is a task in which one can fail if one does not know which route to follow. That is why today we offer you the necessary instruments to navigate safely and be the captain of your ship.
The budget is your map
A family budget is a document used to control household accounts. It reflects your income and expenses as well as the debts you have incurred.
We say it is a map because it helps you visualize:
- The income you receive.
- The items where expenses are concentrated.
- The level of indebtedness you have.
- The savings capacity you have.
By analyzing these four aspects you can make adjustments that allow you to have more savings by reducing expenses as well as knowing whether or not you can incur new debts.
The family budget must then consider a section of income, expenses, savings and debts. In addition, you should review it periodically in order to adjust it to the reality and objectives that we wish to achieve.
Compass to find the north
Once you have made the budget it should be easy to detect what you are spending too much. There are inevitably things you can not cut such as food or payment of vital services, but what you can do is save on them very easily:
- Use saving lights.
- Disconnect devices that you do not use, since they are vampires that consume electricity even when they are not turned on.
- The washing machine consumes a lot of energy, collect loads of clothes to use it at maximum capacity.
- Turn off the television and computer when you’re not occupying them.
- If you can go somewhere walking, give preference to using the car.
- He prefers to eat at home to go out to a restaurant.
- Avoid shopping for fancy things if a lower cost asset can replace the need they have.
- If possible, change your water heater for one step, to spend less on gas.
- Eliminate ant expenses (soft drinks, junk food, cigarettes, valet parking, chewing gum, etc.)
The emergency fund, your lifeboat
Many families do not have an emergency fund that serves as a lifeboat when an unexpected situation arises. What they usually do is use credit cards to get by.
Not everything qualifies as an emergency. Clear examples of this situation are: a disease, work dismissal, the breakdown of the car or a good composure of a necessary good in the home such as the refrigerator or the stove.
Nor is there a unique and ideal amount for the fund. This depends on the personal situation such as income and the number of family members, but experts advise that this be three to six months of normal household expenses. Also, you should know that its conformation does not occur overnight, it may take a few years to have the amount with which you feel safe. What is necessary is that you start as soon as possible.
It is very important and necessary that within your family budget you institute the Savings section. Finance gurus advise that it be 10% of your salary. The above may sound complicated, but if you analyze your expenses you will surely find small leaks of money that you can allocate for your savings.
Involve your crew
Your family is part of the team in this boat, because of this you must be aware of the actions to follow to improve and control the family economy. Maybe if your children are very young, it is not necessary to give details of the financial situation, but to explain to them that from now on some changes will be made to achieve a goal.
For example, if your savings goal is to have a vacation or to celebrate the birthday party of one of your children, ask them to help you by taking care of the resources of the house and collaborating in household chores.
Now that you have the instruments, you just have to decide the port you want to navigate to. We assure you that following these recommendations no storm can wreck your ship.