6 tips to effectively control family budget
(Baonghean.vn) - January is often a difficult month when it comes to finances. The stress of spending on holidays and credit card bills that need to be paid is a pressure for many people... To help reduce the pressure on money, some of the solutions below will help you start the new year more stably.
1. Assess family financial situation
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No matter how you feel about your family’s financial situation, you should regularly analyze and make specific assessments. This will help you ensure your budget is at a safe level or “warn” you to adjust your income and expenses appropriately.
An effective tool to help you evaluate your family's "financial health" is a spending diary. Every day, you should record your spending in detail in a notebook or use software to support spending management. At the end of the day and month, you need to summarize the total income and total spending of your family. The statistics will give you surprising results about your and your family's spending habits.
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The most important step you can take towards a more financially secure year is to create a budget, then work to maintain and grow it. Start by looking at all your monthly expenses such as rent, mortgage, daily expenses, utilities, internet, etc. Add them all up and that’s the amount you absolutely have to pay, meaning a fixed amount that can’t be allocated anywhere else.
From there, you can decide on a reasonable amount to spend on other needs such as food, pet food, clothing shopping, etc.
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Credit cards are convenient and useful when you need something important but don’t have cash on hand. However, relying on your card (and using it for everything) can lead to a downward spiral of debt. When you have a monthly budget, use your credit card wisely.
You should set a credit card spending limit. Unless something unexpected happens and you absolutely have to use it, you should never go beyond it. Keep the limit as low as possible and try not to use the card if you can help it. The limit is not meant to be exceeded if you can spend less than it - that's the rule. The less you spend, the easier it is to pay.
4. Classify expenses
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This step helps you balance and estimate the “budget” for your spending groups. Take an overview of your spending and arrange those expenses into each group and allocate the amount of money needed for each group as a percentage. Depending on each person’s spending needs, these groups will be different.
- Savings group: spend on hobbies, personal needs in the future or time-limited expenses such as savings in the bank, money saved for courses, travel, money to buy a house, pay off loans, wedding gifts,...
- Investment group: spend for business purposes of "making money" such as business capital, money spent on investment funds...
- Contingency group: spend on unexpected expenses such as car repairs, medical examinations, paperwork, etc.
- Daily group: spending on daily items such as clothes, food, small household items, going to cafes, entertainment, monthly bills,...5. Set common goals for the whole family
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Share your family's financial goals with your spouse. This will help you bond and have a clear financial direction for your family.
Opening a joint bank account can be a good first step in helping you and your spouse discuss your financial plans. Discuss and agree on what will go into the joint account and how it will be used; as well as what your separate accounts will be. This will give you the opportunity to discuss and respect each other’s opinions while still allowing you to spend money on your own personal interests.
6. Learn to save smartly
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Don’t just save as much as you can, but set specific financial goals so you know exactly how much you need to save and how long it will take to achieve that savings. The more clearly you define your goals, the more motivated you will be, and from an initial goal, build smaller plans around it.
