When it comes to household matters, of course, it cannot be separated from financial problems. Because managing household finances is not an easy thing. Of course, there is a need for a separate way to manage household finances properly so that all family needs can be met.
In addition, there are many factors that affect household finances. Starting from mandatory needs that must be met to desires or consumption that are additional or entertainment. The reason is, managing household finances is not only the responsibility of one person. Whether husband or wife, both have a crucial role in managing household finances.
The size of the salary often affects how to manage household finances. Not infrequently can avoid the condition of a financial deficit. Especially if the husband’s or wife’s income includes fixed income, aka a fixed monthly salary with the necessities of life that often go up and down.
For those who have a small salary, of course, it will be difficult to save money for several things, including emergency funds, tuition fees, pension funds, buying a car, and so on. No wonder that some run out of money in the middle of the month. It might happen. The reason is, because the husband or wife can not manage the monthly salary properly in meeting the financial needs of the household.
If there is really no choice, mihinoa.com will help you provide solutions in managing household finances. Check out the following explanation regarding how to manage household finances so that they are not wasteful.
- 1 Calculate All Your Income and Spouse
- 2 Create a Detailed Expenditure Budget
- 3 Determine Family Financial Priorities
- 4 Record All Expenses in Detail
- 5 Prepare Financial Post for Emergency Fund
- 6 Keep the Debt Ratio, Make Sure It’s Not More Than 30% of Income
- 7 Separate Savings and Investment Funds
- 8 Buy Insurance Fund Protection
- 9 Reduce Credit Card Usage
- 10 Conduct Periodic Household Expenditure Audit
- 11 Benefits of Managing Household Finance
Calculate All Your Income and Spouse
To manage household finances effectively, all you need to do is calculate all your and your partner’s income for one month. The income referred to here is not only from monthly salary income, but also includes incentives obtained when receiving overtime wages to profits when investing.
This is important to do so that you and your partner can divide the allocation of income you have into needs that must be met. Keep in mind that the first to be met is a primary need. By calculating all income, managing household finances becomes easier.
Create a Detailed Expenditure Budget
Spending money on household finances tends to occur when using money to follow desires, even though desires are not necessarily what you and your partner need. The best way to use a small income is to make a monthly spending plan using a detailed written budget.
Spend the money you and your partner earn according to the plan that has been prepared. When it’s time to buy what you need, you and your partner already have a budget for shopping. However, do not use money beyond the budget that has been prepared, because the remaining money has been allocated for other needs.
Determine Family Financial Priorities
Next is to determine the family’s financial priorities for a month in the form of a priority list. This list will later help you and your partner in managing household finances effectively. By making a list of priorities, the allocation and expenditure of household funds will be more neat and organized.
Later, household expenses that will be included in the priority list include the cost of daily meals, kitchen expenses, electricity bills, water bills, work transportation costs, children’s education when they are of school age, to vehicle or house installments.
In addition to helping manage household finances, this priority list will serve as a reminder that priority needs must be met first. Then, if it is still sufficient, it can be allocated for secondary and tertiary needs.
If you and your partner are still having trouble making a priority list, then you can start by planning a monthly budget in writing. Divide the list of expenses into two, namely: primary needs and tertiary needs.
Primary needs include food, transportation costs, electricity, water and telephone bills, house installments, motorbikes and cars and others. As for the tertiary needs, among others, the budget for shopping for clothes, traveling, to the budget for hanging out with friends or coworkers.
Planning a grocery list here is considered very efficient because by shopping in wholesale quantities, the price will be much cheaper, so you and your partner can save more on buying food and have more savings. In addition to getting used to making a monthly spending plan budget, you also have to get used to complying with the financial budget that has been made with your partner.
Record All Expenses in Detail
The next tips for how to manage household finances so that they are not wasteful, you and your partner should record the financial circulation in detail in a book. Starting from income, expenses, balances, and all forms of budget. Record it in as much detail as possible because that way, finances will be monitored properly.
Even easier, the recording method can be arranged in tabular form such as accounting bookkeeping rules. If confused, you and your partner can look for examples on the internet.
Prepare Financial Post for Emergency Fund
Although it is always said that you have to save money and reduce expenses in some areas, that doesn’t mean you don’t have an emergency fund. An emergency fund is one of the most important concepts to think about when discussing household finances.
Similar to saving, this one tip prioritizes the habit of allocating special funds. Think of it for future needs or health. You can also do this by setting aside certain funds. It doesn’t have to be big, but it’s constant.
Do it regularly and disciplined, so that one day you will not be confused by an emergency that hit and still have funds for other needs. Basically, it is undeniable that the financial cycle will be increasingly difficult to control when married. Increased household needs will go in line with spending. Therefore you should try to save money , limit spending, plan shopping needs, and be wise in allocating funds.
If you’re confused and still can’t apply, the way is other than for basic needs, set aside a portion of your income and your spouse every month for an emergency fund. The amount is relative, it can be 10-30 percent of the income earned each month. Keep in mind, the money that has been set aside every month is for an emergency fund that is only used occasionally or in an emergency.
Keep the Debt Ratio, Make Sure It’s Not More Than 30% of Income
The best way to manage household finances so as not to be extravagant is actually to avoid debt. Because bills and obligations to pay debts can be a burden that makes household finances disrupted. However, there are also a number of factors that inevitably put you and your partner into debt.
The solution, if you have to be forced into debt, use it for things that are basic needs but cannot be fulfilled in the near future. For example, home mortgages. Beyond that, you should avoid having debt.
It should also be noted that what must be done to manage good finances is to maintain a debt ratio. You can make sure the obligation to pay debt bills does not exceed 30 percent of your income. If more than that, household finances will definitely be disrupted.
Separate Savings and Investment Funds
In addition to allocating income for a reserve or emergency fund, you and your partner also need to allocate income for purposes other than routine needs. For example, spending on savings, insurance, and investment. These three things are included in how to manage finances so that they are not wasteful.
All three also have many benefits. Savings, is clearly useful for current and future needs. Income saved in savings can be used for daily expenses or sudden needs.
As for the insurance itself, it has the benefit of protecting yourself from health costs. While investment is generally used as long-term savings so that the money you have does not run out just like that. Then what are the advantages? The profits generated from the investments that have been made can guarantee life in old age.
In managing household finances, there are many ways that can be done to save, have insurance, and also invest. When deciding to save, you and your partner must understand which is the best place to save your money, namely the bank. Saving in a bank in addition to having several advantages also ensures the security of the money you have. Not only that, by saving in the bank, financial expenses can be more easily monitored and controlled.
In addition to credit cards, make sure that you and your partner can use the paylater wisely, not for consumptive needs or using the paylater because you want to shop not because of important needs. It should be realized that paylater is the same as debt, you and your partner still have to pay it and try not to be late paying off debt.
Buy Insurance Fund Protection
There are many ways to maintain health and provide protection or protection. One of them is to buy health insurance products . Having health insurance, you and your partner will certainly get financial protection in the event of a health risk.
In addition to health insurance, taking care of yourself with life protection, aka life insurance, also needs to be done. Some life insurance policies currently offer an accelerated benefit option. Later, the benefit or death benefit can be paid while the insured is still alive.
For example, when a husband who is 50 years old buys the insurance. Then you can file an insurance claim for the cost of caring for your husband when he is sick. Then, the insurance will reduce the death benefit with the amount of money that has been disbursed for medical expenses. Later, the remaining balance will be paid when the husband dies.
Life insurance can be used to replace income streams for the surviving spouse. In addition, providing guarantees for heirs, replacing asset values, maximizing pensions, tuition funds for children and grandchildren, and other benefits.
Reduce Credit Card Usage
Shopping using a credit card is very easy and everything can be purchased. Credit cards can also help manage finances, if you and your partner can use them smartly. For example, using the promo given to buy the items you need.
However, credit cards can also make you and your partner trapped in long-term debt if you use them carelessly. Research has shown that credit cards are the easiest way to spend money, because in addition to the amount of money spent there are also interest and administrative fees charged on credit cards.
If you and your partner really can’t control credit cards, you should forget about credit cards, if you really want to save money and save money. The habit of using credit cards carelessly will certainly make you and your partner wasteful and have serious financial consequences. Do not let the household noisy just because of credit card debt.
Conduct Periodic Household Expenditure Audit
Finally, how to manage household finances so that they are not wasteful is to evaluate household finances every month. Of course, there will be sudden needs that cannot be avoided, so there must be adjustments to family finances. For example, you have no plans to buy your child a school uniform. However, accidentally there is a school uniform that is damaged or too small when the children go to school. This could change your financial plans.
Of course, there are many more that need to be evaluated regarding family finances on a monthly, weekly, or even daily basis for households. To address this, you can take emergency funds from savings or make an agreement with related parties so that costs can be deferred in the following month.
Benefits of Managing Household Finance
There are many benefits that can be felt when you and your partner understand how to manage household finances so that they are not wasteful. Check out the following explanation regarding the benefits of managing finances in the household.
More Harmonious Relationships
When it comes to money, it must be open and transparent. With the discipline of making a household budget, communication between couples will be smoother.
However, this also depends on the communication style of each partner. Some even though they are married have the principle that their respective money is a secret. But there are also those who are even more transparent after marriage so that they both know the income they have.
At least, when the couple commits to making a household budget together, automatically the husband or wife will discuss each other’s views about money more often.
Have a Future Financial Plan
Managing finances is important in order to have a decent life and a calm future. Especially when you have built a household. The necessities of life will continue to grow. You and your partner can start from meeting daily needs to the needs of children.
Also start to be disciplined in making a budget list, so that there is an allocation for savings, investment, and reserve funds. No one knows what tomorrow will be like. When you are married, of course you want your loved ones to have their material needs fulfilled.
Finance will always be an important focus in life, even if it is not the main one. There is no difference, single status or already in a couple, managing finances is a mandatory thing to do. Any amount of money will run out if used continuously without being controlled. Therefore, start being disciplined to manage household finances from now on. In addition to maintaining financial flows, having financial plans for the future, the relationship with your partner will be more harmonious.
From now on you and your partner should be able to say no to debt. Because, if you owe only for the purchase of large assets, such as a car or house, then household finances will fall apart. Therefore, by managing household finances, you can allocate income to save and buy the desired items in cash. This will keep you and your partner out of debt. Because, it’s better to collect money little by little first to be able to buy the desire in cash. When in debt, you and your partner must also think about such a large interest.
Have Protection From Unexpected Expenses
By managing household finances, you and your partner can also allocate a little income for family protection. You and your partner can protect your family’s financial condition and health by making health insurance for each family member.
Life is more orderly and orderly
The last benefit of managing household finances is as a means of controlling expenses so that life is more orderly and orderly, especially about things that are not priorities. When one of the partners is starting to be extravagant and not committed to the plans that have been made, then the couple can remind each other.
In fact it is not easy, because it is usually very difficult to resist the urge. For example, a wife who likes shopping for shoes, even though the collection already fills one cupboard. In fact, if you think about it again, shoes are not a primary need, but a desire that can still be postponed or purchased at a later date.
This is where the importance of the role of partners to remind each other. Especially if you are planning the cost of your child’s education or have plans to renovate your house. Couples must be equally aware and remind each other that everything has a priority.
Keep in mind that you and your partner also need to set aside savings for emergency funds as described above. Because, you and your partner don’t know when you will need the emergency fund. In general, emergency funds are needed for urgent and unexpected needs, such as illness, accident, and so on.
To anticipate this unexpected thing, you and your partner can join an insurance program. Later, insurance will be very helpful if you experience things that are not desirable. You and your partner can join insurance programs, such as health insurance, children’s education, life insurance, and so on. If interested, you can find out more complete information on minihoa.com