How to manage the household finances?
Households, in which there is a husband, wife and children, a financial unit of the smallest. Basically managing household finances as managing finances in the company. In general, when early marriage, frequent difficulties manage household finances, resulting in deficit cash flow occurs at the end of the month, due to financial management have not arranged properly, and there has been no comprehensive planning.
1. Plan for the year ahead.
First, create a plan (budget) in the coming year, which break down within months. Planning is separated between the source of funds (inflows, can be derived from wages, other income from teaching, writing, etc.) as well as the use of funds.
Planning has been listed on the plan that will be done throughout the year, and separate: main (operating costs), development costs, the cost of socialization, the backup (no hidden costs). Operational costs are costs that really should be issued each month without being able to hold, among other things: the cost of electricity, water, school fees, transport, cost of basic material needs / meals a month. Development costs are charged to increase the capabilities / competencies and careers of family members, between; cost computer lessons, English lessons, piano lessons, the cost for the advanced courses for the husband / wife. This cost can still be postponed or reduced, if finances are limited. Socialization costs, among others; donation if a friend got married, someone died, social gathering. This fee can be adjusted with the financial ability, and if finances are limited, choose to follow only for an important social gathering, and it must be followed. The cost of reserves; needed to cover unforeseen needs. Often, our finances are limited, so the post is often no funds.
The division of the posts that you want can be made using a separate envelope, or if possible use a bank savings account. Beneficial use of accounts at the Bank so that we can not easily take the money for purposes outside the budget. Separate bank accounts in the existing ATM cards and ATM cards that had nothing to her, to diversify risk. We recommend that the incoming funds in the savings that there was an ATM is limited, because: a) reduce the risk if the cards fall into the hands of people lain.b ATM) have an ATM card the same as holding cash, so if we’re not careful it can easily be tempted to spend matters unnecessarily.
How to use a credit card? Useful credit card in lieu of cash, you should use a credit card tailored to the budget plan. Thus, no difficulties arise due to excessive credit card usage, which ultimately makes the credit card bills unpaid or delayed payment.
2. Separate sources and uses of funds
a) Source of funds:
Where all sources of funding will be obtained, whether there are funding sources other than salary? Budget should be based on the obvious source of funds, so if there is additional income outside the plan, could be included in the reserve fund, which can later be used for investment.
b) Use of funds:
Closely monitor the use of funds is very important, and which need to be understood is the distinction between the use of long-term and short term. For example: for the monthly operational costs, can use a short-term funds derived from the monthly salary. But if you want to buy something that will be used for long-term, such as furniture (washing machines, refrigerators, televisions, furniture), vehicles and homes, must use the long-term funds. Long-term funds from the reserve fund is not used and has been deposited in a bank account (separate from the monthly needs), or can come from loans. If the form of loans, loan also seek long-term loans, so that it can be repaid each month and included in the plan / budget is prepared. Calculate how many installments per month, does not interfere with monthly cash flow?
3. Create forecasts T account (balance sheet) is simple as well as its cash flow
To determine the position of our wealth, create financial balance sheet forecasts. From the balance sheet we will know how much the property (assets), which consists of: current assets (cash and funds in bank accounts that can easily be melted), fixed assets (furniture, vehicles, houses), and other assets (excluding current assets and fixed assets) Then we calculate how much total debt, separate short-term debt (monthly installments) and long-term debt. Furthermore, we can calculate that the capital itself is total assets (fixed assets + current assets + other assets) minus total debt.
Cash flow needs to be made to determine the cash inflows and cash are expected to be out. By making monthly cash flow, it is expected to reduce the occurrence of shocks in the management of household finances. And with the plan, which is then poured in the cash flow is prepared monthly, for one year ahead, we can analyze whether the financial management of our natural or not. Cash flow should be discussed between husband and wife, so the two agreed to perform according to a written plan.
If there is extra money coming in, such as bonuses, incentives, or the proceeds of other income, the money can be put in savings, which can be used as a backup if things happen unexpectedly.
Hopefully, with the financial management of a mature, yet flexible enough, the spouses will be more able to focus on the development of their respective careers, as well as paying attention to the development of education of the sons of his daughter.
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This blog explains how we can manage the house hold finances.great points were mentioned they are Plan for the year ahead,source and use funds,create balance sheet,financial management.thanks for sharing this information with us