7 Tips on How to Manage Family Budget Practically According to Money Experts
As far as financial management is concerned, it is advantageous for a mom who manages a household with young children if she had mastered the techniques when it comes to money budgeting. As a matter of fact, having knowledge on how to allocate your money will guarantee a secure future and comfortable life for your family.
Here are some of the practical tips given by the experts.
1. Give allowance on a weekly basis
By doing this, it would prevent you from giving your children a different amount every day. It is beneficial for the total budget of the family as well as for the kids.
The President of Money Doctors Inc., a Personal Finance Consulting Firm, Joe Ferreira, once said, “It helps your kids to manage their finances.” In his ‘you-have-to-save-20-percent-of-what-I-give-you’ speech, he stated, “Tell your children to spend as little as possible during the week. You can help them save up to 50% of their allowance per week.”
2. Full of Fun and Creativity
Basically, when we hear the word family bonding, it’s all about dining in restaurants, watching movies in cinemas or go shopping. Truth is, this is actually hurting your budget!
Chinkee Tan, a well-known motivational speaker and author said, “Everything in the mall is costly.”
However, this should not hinder you from having a great time with your kids. There are many fun-filled activities you can still do together in the comfort of your home. Kids love to eat and explore things. So try finding good recipes of, like cupcakes or cookies and allow them to give you a hand in preparing. You can also have outdoor activities like riding bicycles around the neighborhood and even making a mini garden, which can either be a flower or a vegetable garden. If you just want to spend the day in your living room, try your talent in a puppet show. These are guaranteed full of fun!
3. Budget first before Luxury Items.
A financial planner Ofelia Torsedillas M. D., who is actually pediatrician by profession, said, “Expense management requires discipline. You should spend only up to 10% on your luxury items, otherwise, it will compromise your priorities.
4. Save for Emergency Purposes
Every household must secure an emergency fund. It will make it easier when you include this in your monthly budget. Torsedillas said, “You can make use of this fund especially when an unexpected event comes in such as unemployment, illness or injury or any other unplanned expenses.
The emergency fund must be accessible. Aya Laraya, an investment advisor said, “This fund should be placed in such instruments that are easy to liquidate and access. For example, you can keep it in your savings accounts, checking accounts, or time deposits. Don’t worry if your money earns low, the important thing is you have the money right away.
5. Inventory of your shelf before buying groceries
How often you go to the supermarket? As you have observed, those products which are actually placed at one’s eye-level are famous and expensive. The next time you go shopping, check first the other shelves and compare the price. Of course, you are going to choose the product at a cheaper price for you to save money. Tan said, “When you buy generic products, you are making a wise move for the reason of many multinational companies are now selling quality products at a lower price.”
6. Be wise when you use a Credit Card
There is no question about the convenience a credit card gives. Even without cash on hand, you won’t need to worry how to purchase things as long as you have your card with you. However, using a credit card is risky. Always remember to buy only what you have budgeted for a month.
Torsedillas advised, “Pay your credit card bills on time in full. Otherwise, interest payment and late charges can easily encounter the merits of these cards.” Some malls offer freebies and points when you purchase using your credit card. However, “If you focus on these freebies you are led to spend beyond your budget and forget about them,” she added.
7. Avoid and Quit vices
Vices can actually harm you and your family. Thus, smoking and drinking affect your health and your budget. Tan illustrated, “If you smoke one pack per day, you spend around P 40; multiply that by 7 days, and that is equivalent to P 280 pesos a week, P 1,120 a month, and P 13,440 a year! Plus, when you get sick, vices can add to your medical expenses! Come to think about your future.”
Money expert advice courtesy of Good Housekeeping Philippines magazine.