HOW WE BUDGET AS A FAMILY OF 5! Low income, single income or large family budgeting tips!
We plan a family budget
Almost always with the advent of a new family, there is a need to plan a family budget. It is very important that all family income and expenses are visible. Today there are many different programs and tables for accounting and financial planning.
This question worries many, when you seem to be making good money, but money seems to be leaking out of your wallet. Where exactly - it remains an eternal question.
The most important thing when planning a family budget is to establish the amount of expenses that occur over a period of time. After all, very often the estimated costs are radically different from the real ones. How can all this be taken into account?
Learn to plan a family budget by keeping track of all expenses, collecting checks, etc. - this is quite painstaking work. And if you have never done this in your life, even with your best efforts, after a couple of weeks you will start to be lazy, forget about it and miss it. As a result, you won't even get to budget planning and won't consider where your actions are wrong.
The numbers are essentially meaningless, so the most important thing is to ask yourself a few questions.
Questions might be something like this:
- How much money do I spend on my daily expenses? Am I spending too much? If I try to reduce these costs, will I have enough for investment, vacation, training or some major acquisition? Or will you need to look for additional funds?
- How long will I be able to set aside the down payment on my own home? If the term is very long, what should be the income to reduce it?
- How much money is needed for regular monthly expenses such as internet, utilities, food, etc.
If funds are constantly not enough until the next salary and you have to constantly save or over-borrow at the end of the month, this indicates that the lack of a reserve is caused by improper distribution of funds at the beginning of the month or a complete lack of distribution. You need to learn to constantly plan for spending.
What you need to consider when planning family finances?
Let's figure out how to plan a family budget.
You need to capture the following information:
- Approximate data on earnings received and its relation to expenses;
- Prevworthwhile events that require additional expenses, such as birthdays, vacations, loans, tax payments, etc.
- Seasonality also affects the amount of expenses, since before the holidays the cost of groceries in stores increases significantly and in the autumn-winter period the cost of clothes is much higher.
You will definitely not be able to correctly plan the amount of waste the first time. It is important to set a goal and fulfill your financial plan by all means. When you finally start to succeed, and this will only happen when you learn to control your desires, your financial life will be much easier.
This will eliminate the need to resort to loans or credits that take away the lion's share of your not yet received salary. Excess finance will give an opportunity to invest, as a result of which income will increase.
You will no longer make rash and spontaneous purchases. Many people, due to their weakness of character, did not initially accustom themselves to discipline, so they just go with the flow.
However, sooner or later, you need to think about how to properly plan the family financial budget and thereby achieve financial success, not depend on the employer or parents, moreover, to have an additional source of income in the form of interest from investments that are created after correct distribution budget for the month.
When we plan the family budget in advance for a month, there must be a free amount in it, which will be called the amount of savings . The amount should increase every month and every working family member must make a contribution.
Sometimes there are unforeseen circumstances when it is simply impossible to do without a loan. Just in such a situation, funds can be taken from the same amount of savings, but they will need to be returned to their place as soon as possible and with interest, as if you took money on a loan from a bank.
When we plan the family budget for each month , in order to better control our daily expenses, we can calculate the amount of monthly income and distribute it over the number of days. The result will be an amount that you can safely spend in one day.
If the amount spent has become more than planned, the next day you need to restore the balance, that is, do without expenses.
In no case should you save on everything, there are things that you definitely need to spend a certain amount of money on - this is good nutrition, rest and education. In addition, it is important to analyze family expenses from time to time. Perhaps they have something that can be removed or, on the contrary, added.
So, a lot of people make a lot of discoveries for themselves, discovering that a decent amount of money is spent on things that can be completely dispensed with: chewing gums, sweets,cigarettes, alcohol, cafes, fast foods, etc.
How to draw up a family budget table correctly
Using the family budget table makes the calculations much easier. As a result, it will be easier to distribute finances over the month. What should be included in the family budget table?
First of all, these are family income and expenses, as well as the funds that you plan to save. These three points will need to be expanded by breaking them down into sub-points. It's impossible to predict everything, so it would be nice to have a reserve fund.
The very first and most important thing to do is get rid of credit cards and debt. They are the ones who drag you into the abyss of hopelessness. 20% of the total income must be saved or invested and in no case should this money be spent. You will soon realize that it is quite possible to meet the remaining 80%.
At the same time, it is very important to first set aside 20%, and then start spending. Otherwise, it may turn out that at the end of the month there will be absolutely nothing to save. If 20% is too much for you, then you can start with 10% or even 5% in order to create a family reserve fund.
In order for finances to be in balance, 50% of expenses should be food, internet, mobile communications, transportation and basic clothing. 30% can be reserved for expenses such as going to the restaurant, jewelry, books, hobbies.
And the remaining 20% is that emergency reserve. No matter how you decide to plan your family budget , the table should be drawn up in about this percentage.
Remember what is the main reason that made you manage your family budget. It might be a desire to cut costs or spend less than you earn. You should definitely have a goal towards which you will go, no matter what.
Accurate accounting and a table of expenses and income will make it possible to be sure of the correctness of the figures when calculating the family budget.
In order for you to be confident in the formation of the family's reserve fund, you can open a savings account to save money, or better even a deposit without the possibility of withdrawal.
Be more realistic and don't make plans that you are basically unable to fulfill. Better to start small, and then you will definitely succeed.
By setting a small, realistic goal, you can thus motivate yourself for more global achievements. Good luck in all your endeavors!