2023-05-08 12:24:19
Saving is possible. You do not know how? These tips will help you organize finances in your family.
Developing the habit of saving can be complicated, since it requires perseverance and planning. In many families, this practice is not commonso it is essential to find ways to manage monthly household expenses.
If you find it difficult to keep track of your expenses or you still don’t have an organized record of your expenses, keep reading! This article is for you. Below, we’ll provide you with helpful ideas to save money without even realizing it.
Why is it necessary to save at home?
The domestic economy aims to meet the needs of household members.
According to the Association of Consumers in Action of Seville (FACUA), an efficient distribution and use of resources allows the satisfaction of material needs —such as housing, clothing and food—, which guarantee a good quality of life. From another perspective, it could also be seen as a microeconomics that pursues savings to avoid over-indebtedness.
Saving is a fundamental habit to maintain good financial health. Not only does it allow you to meet unexpected expenses, but it also offers the possibility of creating a reserve for the future.
As the wise popular sayings well say, “From penny to penny, the little dollar is made”. An effective way to start with this practice is to reduce unnecessary expenses. This not only helps to have better control of finances, but it can also open the opportunity to achieve important financial goals, such as the education of children.
Follow these tips to manage monthly household expenses!
The effective management of monthly expenses is crucial to maintain a stable economy and achieve the financial well-being of the household. However, it can be difficult to control spending and save at the same time. Discover the recommendations to achieve it.
1. Make a realistic budget and analyze your sources of income
If you want to improve your family economy, start by subtracting! Subtract what you don’t have, what you owe and what you spend.
This simple operation will give you a clear idea of your current financial situation. Do it monthly to monitor your progress and take action accordingly.
Once you have a clear idea of your finances, Prepare a budget that differentiates fixed expenses from variables. Analyze which are your essential disbursements and which ones you can do without. During this task you must identify those that provide you with quality of life and those that are superfluous.
Now that you have a clear budget, it’s time to apply the 50/30/20 formula.
Dedicate 50% of your budget to fixed expenses, 30% to expendable expenses and 20% to savings. With this action plan you will be on the right path to improve your family finances and manage monthly household expenses.
If you need more money to make ends meet, you could look for ways to earn extra. For example, selling items you no longer need online or working as a freelancer in your free time.
2. Keep track of your expenses
The management of monthly expenses is essential to plan. By keeping a detailed control of income and expenses, you can identify areas in which you are disbursing more than necessary. In addition, you establish priorities and allocate the money to the most important needs of the household, such as food, housing and transportation.
Expenses can be classified into four categories:
- Fixed essentials: they include everything needed to maintain a good quality of life, such as housing, food, energy, water, and education.
- Necessary fixes: They are those that are important, but that do not respond to vital needs. For example, clothing and footwear.
- Extraordinary or unforeseen: They were not contemplated in the family budget, precisely because they cannot be foreseen. For example, a home repair or an urgent visit to the doctor.
- Expendable: They vary, depending on each family. Money dedicated to leisure or travel can be considered here.
Another option that you can use to keep track of your expenses is to use a banking application. There you can maintain control of your finances and observe your balance in real time. In addition, several of them allow you to set savings goals and receive alerts when you approach your limits.
3. Save to prevent
It is important that we generate reserves to cover emergencies, for retirement, to make investments and to meet personal goals. According to a post from business reality, It is advisable to save 10% of income until you have a reserve equivalent to 3 months of salary.
Save money for emergencies: unemployment, illnesses, accidents.
Saving at home optimizes expenses. Although there are no magical solutions, you can opt for some simple practices.
If you want to reduce your electricity bill:
- Use saving light bulbs.
- Don’t fall asleep with the TV on.
- Disconnect appliances that you do not use
- Turn off the lights every time you leave the room.
- Unplug the air conditioner or fan when you leave the house.
To lower your water bill:
- Fix the leaks.
- Opt for a quick shower and turn off the faucet to lather up.
- Turn off the tap when brushing your teethwash the dishes or shave.
- Keep an eye on your toilet to make sure there are no water leaks.
And in the supermarket:
- Reduce the payment with credit cards and choose to buy with cash.
- Before you go shopping make a list of the products you need and stick with it.
- Compare the prices. Sometimes you can find quality products from cheaper brands.
4. Use your credit card wisely
Try not to exceed the use of your credit card.
The card is not additional income, but a loan that must be repaid with interest. One of the best ways to use it is for contingencies or emergencies. In this way, you avoid accumulating debts.
You have to set a limit on your monthly credit card spending and always make sure you can pay the full balance at the end of each month. Likewise, the terms and conditions of the card contract must be carefully read, including interest rates, commissions and payment terms.
5. Learn to distinguish between needs and wants
It is important to distinguish between needs and wants, because this allows us to manage our resources effectively. The needs correspond to those expenses essential for survivalsuch as food, housing, health care, and utilities. On the other hand, wishes are non-essential and include clothing or travel.
If we do not learn to distinguish them, we can fall into the trap of spending money on things that are not essential. This can lead to a financial imbalance and difficulties in managing monthly expenses.
Managing monthly household expenses is the task of the whole family
To manage monthly expenses effectively, all family members should be involved. This involves knowing your regular income and disbursements, as well as identifying those areas where you can reduce expenses.
It is key to establish a realistic budget and follow it rigorously, making adjustments. With good management of household finances, a balance can be achieved, which will contribute to everyone’s peace of mind and well-being.
By following these tips you will be able to manage your monthly expenses more effectively and save money effortlessly. Every little action counts.
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