Household Finance first time must you do is make plan budget at one year ahead, and stacking each month. Plan budget is not same from source of funds (salary, selling, result of teaching and other income) so must be on separate and don’t forget must separate too from use of funds. On plan budget from household finance has listed must be do it at one year ahead, and separate from other funds, now I want explain about this, follow me
In household finance first is Primary (Operational Cost), Secondary (Development Cost), Social Cost, and unexpected costs. Primary (Operational Cost) is costs that must be issued each month without being able to be delayed like cost electricity, water, school fees, transport, cost of basic foods a month. Secondary (Development Cost) is cost for improve the capabilities / competencies and careers of family members, like cost for computer lessons, language lessons, piano lessons, and advanced courses for the husband / wife. Development Cost can still postponed or reduced if your finances are limited.
Next at household finance with social cost like contribution if a friend got married, someone died, and social gathering. This cost can be adjusted with yours financial capacity or finances are limited. Choose to follow only important social gathering, and it must be followed. Unexpected cost can be used for close unforeseen needs, often we are limited financial. My household finance tips is about make your division was a way to separate to individual contain so as not mixed with other. Or if you have much time you can make a bank savings account for your different cost.
I think if we discussion about safety with bank savings account, best way is to open a separate account just for unexpected expenses. And how about credit card used? Credit cards just substitute from cash money, but if use credit card must confirm with budget planning. That’s you never no difficulties arise due to excessive use of credit cards, which in turn makes the credit card bills unpaid or delayed payment.
Use of Funds more important to know how about this, where flow of these funds flowing. And which need to be understood about long-term cost and short term cost, if you can’t distinguish you will wasteful or run out of money. With my household finance you can differentiate yours long-term cost and short term cost, I will show you my example for monthly operating expenses, you can use a short-term funds derived from the monthly salary, but if you want buy something that will be for used long-term, maybe like furniture (washing machines, refrigerators, televisions. Vehicles and homes have to use long-term funds. Long-term funds from the reserve fund are not used and have been deposited on bank accounts (apart from the monthly needs) or can be derived from household loan. If the form of loans makes sure take long-term loans. So that can be each month and included in plan budget drawn up. Calculated all monthly installments so as not disrupt the cash flow of your household finances.