Certainly among acquaintances, friends, and relatives you can take a few persons who every month, “can hardly wait for 1st”. On the other side, there are some who can not only plan monthly costs but can also come to the aid with a loan. Which group you belong? Cost planning and budget management skills are largely worn out of the house and family, but in time they can improve.
Our financial habits are, therefore, a reflection of education, life circumstances and character. But, psychologists say that we are all generally more inclined to saving or spending.
The art of keeping the budget
Economists say that the basis of keeping the budget, whether it is about the family budget, company or country is quite simple. We have to earn more than we spend! Although it sounds almost too simple, that assertion is absolutely correct. And not only that, but points us to two possible solutions to any financial problems. To increase income or to reduce expenses.
A very simple calculation that will help you to determine whether your budget is in well balance is to add up and compare the total monthly family income with total monthly expenditures. If this comparison shows that at the end of the month, after payment of all costs remains more money, you can safely consider yourself as a good manager of the family budget! The rest of money you can put into savings in the bank. Detaching as insurance or private pension or to use it to solve some important issues for your family. It is important that you know how to balance your budget.
But what if the cost is greater than revenue? It can happen sometimes as an exception when you have some unforeseen expenses that you have to cover from current income. Or if the lack of money at the end of the month has become the norm, that means that your budget is definitely “in the red”. In this case, use one of the above-mentioned tricks: reduce expenses, increase revenue, or do both.
Increase revenue, so to find a better paying job or extra work is definitely the most effective solution. But if this is not possible, do not hesitate to deal with rationalizing costs.
Every family is unique. But, if you have a clear view of the monthly expenses you will find the easiest way to make priorities in spending. How?
Always have for fixed costs and regulate variable costs
Certain expenses are fixed, you can in advance count how much money you need to set aside for them. For example, rent, or rate for housing loans or the cost of stamps for transport. Others are “variable” costs (ranging from one month) in which we can influence and reduce pressure on household budgets. Just by reducing variable costs is easiest to achieve monthly savings. These include, for example, the cost of feeding outside the home, a drink with friends after work, lots of toys for children or mobile phone bill. In accordance with your needs, prioritize and determine which an area where you could save is.
Include the whole family
When it comes to household budgets and making savings, it is important that all family members contribute to cost reduction. Do not let someone feel injured because it believes that just he/she must be deprived of the things they care about. Instead of it, distribute savings equally.
Be careful with credit cards
Do not carry a credit card with you when you go for a walk. We often have the impulse to slip the card because it seems so easy and simple, ignoring the fact that in this way we pay interest. And that this buying is not just as good when you pay with money you have in your account.
Plan the procurement
Plan a higher monthly food supply. Track and compare prices in stores. For everyday small purchases in smaller shops just leave daily purchases of bread, milk and basic necessities. Often in major retail chains are lower prices. Or have certain items at discount prices, which you can use to purchase monthly.
Treat yourself wisely
Spending money towards priorities does not mean you have to give up all the costs. On the contrary, agree with the family and come up with a way to worship once a month for the effort. That may be a family trip to the cinema or the zoo. Something that is not too high costs in which all family members will enjoy.