10 Tips on How to Manage Your Household Budget
This week we have a guest post by Jane from Fantastic Cleaners Melbourne!
Taking care of a family and a household is a very difficult task, but taking care of the household budget and finances can even seem impossible at times. With all the costs of living increasing exponentially in the last few years, it’s hard to cover all your family expenses, buy food, save something and do it all without breaking the bank or selling a vital organ on the black market. But we all have to survive in this economy and adapt, if we want to survive and thrive. Here are 10 tips you can use to manage and improve your household budget:
Set a realistic budget
Budgets can be very tricky, because they are different depending on your personal needs and expenses. You need to make sure that yours is consistent with your spending habits and your monthly plan. Now, let’s make it clear, the realistic budget doesn’t mean that you can assign money for all your whims and impulses, it means to set aside money for all the most important things and to make some savings. If you want, you can also map out all your expenses by categories, such as rent, utilities, credits and other bills, groceries, savings and entertainment. If the spare money is too little after you’re done drafting the budget, you can take a look at all the categories and make some cutbacks or relocation's.
Think of the long-term too
The week-to-week or month-to-month planning is necessary and something most of us do. However, planning for the long-term is also extremely important, because things like rent, mortgage and utilities pile up every single month. And no matter how stable your financial matters may look at the present moment, there are no guarantees that this will continue forever, so you need to have an emergency plan. You can consider having your paycheck split into more than one account, to ensure that you’re putting some money aside for any unforeseen situations.
Track your spending habits
Nowadays you can find many handy applications, which will allow you to track all your spendings from your phone, and will alarm you if anything unusual happens with your money. Such apps are Mint, Pocket Guard, Wally, You Need a Budget (YNAB), Goodbudget, and many others. All of them offer great budgeting tools, which will help you categorise all your incomes and expenses, and will help you realise different trends in your spending behaviour. This way you can easily see if you’re spending too much money in a category than usual.
Get the whole family on board
Being the one who enforces the budget can be a very hard task, especially when it comes to things like going out, eating at restaurants or having fun. Kids rarely understand the importance of money and how hard it’s to earn it, so they can oppose you and make things difficult. Instead of taking in all the negativity, you need to sit them down and explain the situation as well as possible. To make them feel more included, you can provide them with the option to choose their fun activities on their own, but with the rule that they have to stick to a certain budget. By giving them the opportunity to participate and make decisions, you will save yourself some nerves and you will teach your children about responsibility and to value money.
Use lists when shopping
One of the best ways to stick to your household budget and avoid unnecessary spendings, is to make lists for everything. Before you go into a store, first sit down, consider and write down everything you will need to buy. When you get in, buy only the things from your list. Many people get distracted by various discounts and special deals, and end up buying a lot more things than they actually intended. Try to restrain yourself, because this is a tactic used by supermarkets to make you buy more without actually needing the things you purchase. A good way that will help you with your lists, is to make detailed meal plans for at least a week ahead, this way you will know the exact ingredients and amounts you will need to buy. Lists work not only when shopping for groceries, they also work for buying cosmetics, detergents, school supplies and other things you buy on a regular basis.
Lower unnecessary expenses
Nobody likes this part, because this usually means that the money we have is not enough and we need to cut back on something. But even though it’s unpleasant, sometimes lowering some of our expenses is the best way to protect ourselves from debts and other bad financial situations. Things like rent payments, utilities, medical bills and food are all necessary, but things like snacks, fancy coffees, eating out every evening and going to the movies are not pivotal to our survival, so they can be revised. Just go through your lists and monthly plans and draw a line between everything important and the extras. This will make it easier to decide what to keep.
Monitor credit card spendings
Credit cards have a lot of benefits, but many people can’t contain themselves when they own one, and they get into all kinds of trouble by making purchases they can’t actually cover. This is why you have to possess self control and use your credit cards for only the most necessary payments and purchases. If you use your credit card for the rewards, make sure to pay off the balance at the end of the current month. Leaving a hanging balance can accumulate interest and other charges, which will make you spend more for the items than it’s actually worth. So, credit cards are only for emergencies.
Look for ways to make extra cash
In this beautiful digital world, you can easily find new ways to make some extra cash that will help with your household budget. There are many incentive programs and websites where you can watch videos for money, or fill surveys and take quizzes. Some of them give hard cash, others give you points that you can exchange for gift cards and other perks. There are also many other ways to gain some extra income, like renting out a room in your house, getting a second, part-time job, or taking additional assignments in your current job. It all depends on how much extra cash you actually need.
Consider lifestyle changes
Making some extra cash is also a good idea, but sometimes it’s hard to find a good additional job that will pay well. In such cases, you can consider making some lifestyle changes, which will unburden your budget a little. For instance, you can use less electricity at home to lower the bills, you can buy cheaper products while grocery shopping, buy store-branded detergents instead of the expensive ones, you can collect coupons for better savings, or you can take the bus instead of driving a car. There are plenty of options if you need to save some money.
Author Bio:Jane is a mum, a blogger and the marketing manager of Fantastic Cleaners Melbourne, a licensed cleaning and housekeeping company, which provides services both for residential and commercial clients.
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