4 Stages for Family Budget Management

Planning family budget is the task of every person striving for financial stability, money accumulation, and realization of long-term financial goals. Today we will tell how to properly distribute the family budget to live in prosperity and increase family income.

The average family budget consists of two sources of cash receipts (income of each spouse) and four directions of their spending (general family expenses, costs of children, and personal expenses of each spouse). The distribution of the family budget implies the correct distribution of these two items of income into four items of expenditure.

Unfortunately, most people do not know how to properly distribute the family budget. As a result, there is a typical “constant short of money” situation. Almost no one admits that one of the most important reasons for the lack of money in the family is the illiterate allocation of the family budget and the inability to manage household finances. And now let's consider the main stages of the proper distribution of the family budget.

Stage 1. Debt repayment

If a family has debts of any nature (loans, arrears of payments, borrowings from friends and relatives, etc.) then all cash receipts must first be directed to repay debts. Moreover, it is desirable to repay the debt in advance, ahead of schedule: the sooner you get rid of debts and loans, the sooner the load on the family budget decreases, and you will be able to spend cash receipts for more useful expenses.

Stage 2. Creating savings

If there are debts, this stage can be skipped until the debts are completely eliminated, since this is more important. But if there is no debt in the family, this stage becomes the first and most important. Here you must use the rule “pay yourself first”. That is, first of all, you have to create a “reserve” for the future, thereby paying yourself, and then spend money on other issues, covering current expenses. These three forms of monetary assets have a significant difference in their purpose; you should create them in exactly this sequence (first – reserves, then – savings, and after that – capital). Every month it is enough to allocate funds from the family budget to one of the listed assets: the one that is currently the most relevant.

Stage 3. Payment of fixed costs

At this stage of the distribution of the family budget, it is necessary to pay all the fixed monthly expenses (utilities, education, mobile communications, the Internet, etc.).

Stage 4. Distribution of money for personal needs

At the last stage, it is necessary to evenly distribute funds to pay current expenses. To do this most accurately and correctly - use a variety of cost optimization methods.

Now you know how to distribute the family budget. As you can see, there is nothing difficult, you just need to force yourself to manage your personal finances exactly the way you need to do it, not the way you used to, without paying any attention to it at all. Planning family budget and taking into account household finances will make your life better with beautiful women ukraine. By doing it, you will always know how to distribute the family budget in advance and monitor the implementation of your plans and goals.