Of course, planning a budget for the whole family is very different from managing your personal finance. It’s not just about changing the amount of monthly income and expenses. The goals for which the budget is calculated, the possible risks that should be taken into account in the calculations, and the approach to money, in general, are changing. So, to ensure the well-being of the family, it is necessary to develop the skill of managing finances.
To get started, remember the following basic rules of effective household budget maintenance:
- Reasonable money saving. Fund accumulation should not become the meaning and ultimate goal of the process of saving money. In addition to an untouchable strategic reserve in case of deprivation of a stable salary, save up for something specific — a gift, a car, a trip, etc. So the accumulation will be more efficient because the goal always improves productivity.
- Don’t delay paying off your debts. Pay your debts on time, regardless of whether you borrowed money from friends or used Payday Depot. If there is no urgent need for a loan and you do not have a stable income, it is better to avoid credit.
- Discuss with your family your budget and your long- and short-term plans that will require spending.
- Allocate income and expenses according to the current financial situation. Even if you plan to increase your income in the future, you should not spend money that you have not yet received.
- Ensure order, organization, and stability in everything related to the maintenance and planning of the family budget.
There are many different methods that help to systematize the maintenance of the family budget. One of the most popular budgeting methods is the classic envelope method.
The method lies in the distribution of all incomes of all family members in conditional envelopes (their number is determined by each family individually). Each envelope represents a specific category that requires spending. Then, when the time comes to pay for a product or service from some envelope, you take the money set aside for this particular category. Of course, some categories are priorities, like health and nutrition, so, if necessary you can take money for them from other envelopes. At the end of a certain period (one month or half a year), be sure to analyze the effectiveness and feasibility of categorizing funds. This will help improve budget planning in the future.
Also, many families around the world have enlisted the support of applications for managing finances. For example, you can use such apps as Splittable. An ideal application for those who share the cost of maintaining a home with someone. The application will tell you who pays for the utility bill and how much money each of you spent on buying food, household chemicals, and other necessary goods. Thanks to this application, you will be able to fairly share the necessary expenses among all households. Such apps as Money Manager, Money Lover, CoinKeeper, Bills Monitor, and others will be great helpers as well.
