How easy it is to keep a family budget: draw up a plan of expenses

2024 Author: Malcolm Clapton | [email protected]. Last modified: 2023-12-17 03:44

Everyone understands how important it is to manage a family budget. But for whom has it become a habit? For me, no. And I'm not the only one. According to the results of a poll by the site nacfin.ru, in Russia only every fifth family keeps a written record of income and expenses. Of these, 13% do not take into account all income and expenses. We will introduce you to the idea of a spending plan - an effective way to control your finances.

We should be guided by our needs, not our desires.

George Washington

The benefit of a spending plan is that you don't have to write down what you spend every day. You will need to do this only for the first 2-3 months to determine what your main expenses are and how much money they spend on them. If you already imagine these expenses, then the preliminary stage can be excluded.

And then you need to do this:

1. Determine your monthly net earnings (salary minus taxes).

2. Determine fixed monthly expenses. They may vary slightly, but in general they are always about the same from month to month. Here are examples of what can be included in the fixed spending list:

   • mortgage payments;
   • loan payments;
   • Payment of utility services;
   • payment for a rented apartment;
   • food;
   • household chemicals;
   • car expenses: gasoline, car wash, seasonal rubber change, insurance;
   • payment for public transport (if you drive it);
   • payment for the Internet;
   • payment for mobile communications;
   • school / kindergarten costs (if you have children);
   • buying seasonal clothing.

After you deduct the fixed costs from your monthly income, you are left with an amount that you can freely dispose of: postpone or spend as you wish.

The obvious benefits of a spending plan

1. It helps to separate what is needed from what is desired. You begin to understand which costs cannot be avoided, and which can be postponed for a month or completely eliminated.

2. Each time at the beginning of the month, you can change your spending plan slightly to include large purchases such as household appliances. And immediately cut some budget items so as not to fall into a financial hole.

3. By making such a plan, you are clearly aware of how much you are actually spending each month. The first time you do this exercise, you may be very surprised at its results. For example, it turns out that the amount required for fixed spending is greater than your salary. Then it's no wonder you can't get out of loans.

With a spending plan, you will be able to figure out how you can increase the amount of free money. There are two main options:

• start earning more;
• cut costs if possible.

You can use them separately or both at once, so it is more effective.

4. The spending plan will not require you to be closely tracked. Fixed spending rarely changes from month to month. You don't need to keep track of your spending every day, you just need to remember how much free money you should have left.

Planning your spending is a good first step towards starting to manage your money wisely. Try to at least start, and I assure you that after a while you will start to enjoy the fact that you have your finances under control.