4 Easy Tips on How to Manage Your Family's Finances

Thursday, December 01, 2022

     As the years pass by, I've come to realize that the phrase "adulting is real" is hitting close to home. Now, I truly understand what my parents would always tell me back in my younger years about the importance of budgeting and saving money especially when you have your own family. 

     We have a bakeshop and rental business way back that's why I easily get what I want without begging my parents to buy it for me. They're the ones who manage our finances and all I do is ask them to buy it even if it's not necessary. There were times when they will not give me what I want because they are saving up in order to sustain our business. My father is strict when it comes to managing finances and he would always tell me to know the difference between needs and wants. Are you struggling with your finances and want to learn how to easily manage them? Read more about these easy tips after the jump.

4 Easy Tips on How to Manage Your Family's Finances
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Set a Monthly Budget

     When I got married, I told myself to limit my spending on unnecessary purchases that's why setting a monthly budget will help us save money for the future. In creating a monthly budget, always make sure to have a list of expenses that includes rental (if applicable), food, utilities, transportation, savings, and education. Since we only have a child, it's not taxing to fund his elementary and junior education. If there will be an extra budget for the month's allocation, it will be spent on simple leisure like dining out and family vacation.

Know Your Needs and Wants

     According to Investopedia, U.S. Sen. Elizabeth Warren popularized the 50/20/30 budget rule in her book, All Your Worth: The Ultimate Lifetime Money Plan. The rule is to split your after-tax income into three categories of spending: 50% on needs, 30% on wants, and 20% on savings. Needs are simply the essentials that include food, water, shelter while wants are those unnecessary items that you desire and save,. This intuitive and straightforward rule can help you draw up a reasonable budget that you can stick to over time in order to meet your financial goals. BUT, life happens and even throw us unexpected expense, for example, an increase in your child's school tuition fee. How will you budget and save money for the next school year? The answer can be found below :)

Short-Term Financial Institution for Help

     Loan products are often created with a specific purpose and situation in mind. Some loans are meant to be used for business needs, others can be spent at the pleasure of the borrower, and there are also loans specifically designed for short-term financial solutions out there for people who struggle with their finances. These loan programs offer various benefits that suit the needs of the borrower, such as different repayment periods, interest rates, processing fees, and maximum loan amounts. Before submitting your loan for education application, compare your options and find the ones that are best matched with your purpose and capacity to pay. 

Set up an emergency fund 

     Don’t let life’s unwelcome surprises—a major home repair, a health emergency, or worse, unemployment—throw you off guard. Make sure you have an emergency fund saved up that is at least 3 to 6 months’ worth of your living expenses. How to compute? Add up your expenses for a month (Don’t forget to include the monthly equivalent of your annual expense like school tuition, insurance premiums, taxes, etc.) and multiply it by three months (or up to six months). That’s how much money you should have, kept, right now! This is your financial safety net when the need arises. 

     These are simple and easy tips on how to manage your family's finances that you can start assessing now. It may look overwhelming thinking of how much you need to budget on a monthly basis. Cutting off those wants so you can put them on needs and savings can be disappointing but it will help you in managing your finances.

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