Managing the family budget is one of the savings requirements. Every day you make economic decisions, choose how much to spend and what to buy immediately and which expenses can, however, be deferred. Careful management of the family budget allows you to do this Identifying and reducing any waste, managing resources more effectively and being able to calculate how much you can save and allocate for investment.
Understanding the sources from which the available resources are derived helps ascertain the true potential to meet certain spending needs or achieve certain investment objectives.
A good habit of categorizing sources of income according to their stability and expenditures according to their needs is useful for understanding whether you are able to face unexpected expenses that are of some importance.
The Regular monitoring of your family budget It means periodically checking your family’s financial income and expenses.
Income includes: income derived from income (work, pension, etc., own and other members contributing to the maintenance of the family unit); Real estate proceeds (rents, etc.); Financial income (government bonds, stocks, mutual funds, etc.); Income from other sources (refunds, donations, inheritance, etc.).
Expenses include: all current expenses (house and bills, insurance and finances, food and various purchases, medical expenses, hobbies and leisure time, cars, transportation, children’s expenses); Expenses attributable to past commitments (mortgages, loans, etc.); taxes.
The perception of expenses varies with different payment methods, amounts, and the purpose for which you respond.
Moreover, for each item of your household budget, you must take into account the frequency of occurrence of income and expenses. This way, by calculating the difference between income and expenses month by month, you will be able to determine your savings or the starting point for better managing your finances.
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