1 Make a family spending plan
Having a specific spending plan for your family will help you control your monthly expenses effectively. For example, you can divide your expenses each month by percentage like the JARS method (6 financial jars) like this:
- Essential expenses (55%): Including expenses for family meals, food, medicine, gas for transportation (car, car rental, …), and house rent (if any).
- Savings (10%).
- Investment expenses (10%): Additional knowledge from courses, books, documents, or investments with profitable business purposes, etc.
- Enjoyment expenses (10%): Including expenses for short-term relaxation purposes such as travel, watching movies, exchange and entertainment activities, etc.
- The cost of giving (5%): It is the cost for others outside your family such as charity work, community activities, etc.
- Free expenses (10%).
Depending on your family, the above expenses can be changed by different percentages, in which you should prioritize essential (fixed) expenses each month and reduce and be flexible with expenses. otherwise reasonable in his family.
2 Balance your spending with the 50:30:20 rule
Applying the 50:30:20 rule of spending will help families ensure reasonable expenses without affecting essential needs. Specifically:
- Set aside 50% of your family’s monthly income to spend on fixed fees such as utility bills (electricity, water, Internet, etc.), meals, transportation, and rent (if any).
- Leave 30% of income to meet the personal spending needs of each member, such as study expenses, clothes shopping, travel, entertainment, etc.
- The remaining 20% of income is for financial purposes such as business investment for profit, savings, and reserve funds (for urgent things).
Alternatively, you can also consider the 50:50 rule to manage household expenses, but this method usually applies to households that do not have a lot of expenses. Specifically, the family’s monthly income will be divided into 2 equal parts:
- 50% of income: To be spent on living expenses.
- Remaining 50% of income: Used for savings purposes related to common family goals.
3 Make a reasonable savings plan
You can apply a reasonable savings plan according to the Japanese Kakeibo method. Let’s find out the step-by-step process with Dien May XANH:
Step 1: Divide your monthly income into 4 parts:
- Part 1: Essential expenses include food, medicine, utility bills, vehicles – petrol, transportation, etc.
- Part 2: Non-essential expenses such as money for shopping for clothes, entertainment, exchanging friends, etc.
- Part 3: Investment expenses for future goals such as knowledge improvement courses, money for children’s education, health check-ups, etc.
- Part 4: Unexpected expenses such as car repairs, weddings, cribs, etc.
Step 2: Check the total expenses at the end of the week with the aim of rethinking whether the expenses are reasonable, how much is left over, and how much needs to be saved to complete the month’s goal. Thus, you will be able to control reasonable expenses for the next week.
4 Discuss with family
You need to take the time to discuss with family members to know clearly about the necessary expenses, such as planning to study more courses, buy equipment, buy a car, etc. This job will know. Find out which expenses need to be prioritized or supplemented with the family’s necessary expenses.
Not only that, but you can also clearly divide financial responsibilities among family members. For example, you will be in charge of fixed expenses in the house such as meals, electricity, Internet bills, etc., while your spouse is in charge of other expenses.
Then, at the end of the month, the couple can sit together to summarize the expenses, income, and balance each month.
5 Pay attention to the costs incurred
In daily life, you may have to spend on unexpected expenses such as car repairs, wedding/birthday/birthday gifts, clothes, etc., and some entertainment activities, and exchanges.
Therefore, in the family spending plan, there will be this expense, you need to review and specify how much % of your income each month is for this group of expenses!
6Don’t forget to check your credit report
If you use (a credit card), then pay attention and check the payment term, to avoid bad debt as well as other credit loans that you are using.
In addition, you can use financial apps to assist you in managing your spending such as Money Manager Expense & Budget, Quick Money Recorder-Budget, etc. Please refer to the functions of these tools for you. Choose the app to suit your needs. The application even suggests you a reasonable spending plan that is worth a reference.
7 Think carefully before spending
We often buy unnecessary things every time we go to the supermarket or go shopping at the mall. Therefore, you should carefully consider your spending during shopping.
For example, write down a list of items and foods before you go shopping. This saves time shopping, helps you buy the necessary items, and control expenses.
Moreover, you can still apply the 24-hour shopping rule, which means that when you feel like buying something, think and consider it for about 24 hours from the time you want to buy. This will give you time to decide if the item is really worth buying.
8 Get into the habit of saving money right after receiving your salary
In fact, the spending needs seem limitless, if you do not control your spending properly, it will be very difficult to have financial abundance. Therefore, after receiving your salary, you should practice saving.
For example, you can think of some current savings packages such as:
- Demand savings deposit: This is money available in your account that is still charged interest by the bank without term, even though you do not need to register for a demand deposit at the bank. On average, the highest demand interest rate is 1% per year.
- Term Savings Deposit: Money is deposited in a package from 1 month to 3 years depending on your needs, helping you to receive the highest interest rate depending on the regulations of each bank.
- Flexible deposit: It is a form of saving money like a term savings package, but you can withdraw money at any time during the use of this service package. However, the remaining amount in your account will be charged interest according to the bank’s policy.
- Savings and installments: It is a form of saving money in a flexible way but still receiving high-interest rates. Each month, you will enjoy a term interest rate according to the bank’s own regulations.
- Floating Interest Savings Deposit: It is a form of saving money with a term with an interest rate based on the basic interest rate of the state bank or based on market trends. However, this form of savings deposit is quite risky, because your profit is basically based on constantly changing market trends.
9 Create an “emergency” fund for the family
Creating a family emergency fund is essential. This amount can account for about 10% – 20% depending on your family’s monthly income, helping you quickly solve problems that arise in life, reduce money jams, or can’t solve problems. solve problems in life.
In addition, when you have this money, you will not have to worry too much about expenses arising out of control and can use this reserve to spend on some urgent things, making the work easier. than.
10 Purchase at places, the application supports refunds and discounts
Take advantage of promotions, and accumulate points or promotional card codes when shopping at supermarkets or online shopping websites today. Because this habit will help you save a part of your expenses on buying necessary supplies as well as shipping costs incurred if any.
Sources for reference and synthesis: US. Bureau of Labor Statistic, Moneysmart
With the above sharing, hopefully, you have gained 10 more effective financial management tips for your family that you should not ignore!