How to do the money saving plan? You know a quick respond to this simple question? How much your family spends in a year for cinema? How much will cost, next year, the fixed payments for the TV? What is the actual cost for each kilometer path of your car? We all have a vague idea of how much we spend for each item. But when we go into details here comes the surprises.
Is sufficient to make some examples. In the big cities, a family of three people who went to the cinema twice a month spends on this recreation over €550 (~ $700) calculating an entrance fee of €8 (~ $10). The movie ticket is usually included in the small expenses for which it is not worth to keep a detailed accounting, and yet these small expenses brings figures often considerable and still to keep in mind when preparing a family budget.
For those who don`t know, budget is basically a money saving plan, outlining your financial goals. Having a budget, you can well establish and regulate funds, set and achieve your financial objectives, and make advance decisions as to how you want your finances to function well for you. The main idea in budgeting is for you to put aside a certain amount of money for expected as well as unexpected costs.
We often have poor knowledge about actual costs. For the car, for example, are not considered only fuel, lubricants, motorway tolls, but also amortization of the initial cost, repairs, garage, parking and small incidents without liability to third parties.
An in-depth knowledge of these and other details of the family budget allow better management of the domestic economy and optimal utilization of resources. To better control the economic situation of the house and manage the family assets more wisely, you can effectively make use of three important tools: the budget, the balance sheet and the financial statement.
The Family Budget
The family budget can be a useful organizational choice, but only under certain conditions. Keeping track of every little expense, for example, is a waste of time. But we must not exaggerate even in the other direction, forgetting to note important outgoings. The family money saving plan, therefore, should not be managed with stiffness, but with some flexibility, without losing its main function, which is to build a good report of our economic situation, so that we can keep it under control.
But let’s get practical. Once you have organized your budget, you just have to record day-to-day expenditure and incomes daily. Doesn’t need great precision, is sufficient that these reports are reliable, albeit with a certain approximation and that can be summarized at the end of the month.
Simply, budgeting means an estimation of home expenses, basing it on previous expenses and bills. Making a yearly money saving plan is very simple, as long as you can be based on a careful accounting of the previous 12 months. The initial step to take in budgeting is to find out how long will your compensation last. Define fixed expenses like car payments, home rental, insurance, etc. Also follow up your expenses thoroughly for a month so you can discover and understand where your funds are going. It is sufficient to check the old expenses and then project them, if you plan to repeat on subsequent period, adjusting for inflation expected and integrating them with other new that you want to perform. Through proper determination of your “spending patterns”, you can immediately identify solutions for effective budgeting.
Filling the family budget or money saving plan involves summing management, identifying the channels of spending which can be contained, and those where it intends to intensify its commitments. A good money saving plan, in addition to the calculations of the current management of household expenses such as maintenance and eventual house rent, food, clothing, education, insurance, taxes, leisure and other, must take account of future commitments of an exceptional nature, such as the expenses for the graduation of a son or for a postgraduate course abroad, the heavy investment in a new town house or vacation home, redemptions of social security contributions etc.
Money Saving Plan Secrets
The strategic solution to make a successful budget is inflexibility as well as flexibility; there are fixed expenses so payment must be an inflexible factor.
Budgeting will best work when very scarce omissions are made to greater limits. The idea here is to formulate goals and plans, then abide by it as much as you possibly can.
Here are some tips on how to budget:
- Have good sense of money management. Your attitude is crucial. Reach an agreement and compromise and know the significance of reducing costs; it all involves a lot of sacrifice.
- Practice frugality but with dignity. You can have fun with little or without spending at all. Rather than going shopping, play with the kids at the beach or at the park.
- Plan your situation. Make a listing with your incomes to one side and your expenses on the other side.
- Distinguish between luxuries and necessities. List down what you believe as luxuries, with it, divide the list in half, crossing out half of them.
Budgeting is an effective and fundamental tool that is readily available to everyone. Consider making your family money saving plan, and benefit from it.