Finance is one of the leading cause for family issues. Couples usually argue over different ways of spending it, the need to save it and how to invest it. Family relationship often improves along with the fact that finance is handled appropriately. When finance is not managed properly, finance-difficult time may strike. And there is nothing more frustrating than having bills to pay but not having enough of money at hand. Knowing how to manage family finance can help you reduce financial stress and overcome financial obstacles. Sometimes the smallest change of lifestyle can make a huge difference on financial situation.
Here are 5 tips to help you manage family finances.
1. Spend Less Than You Earn
If you are tight on budget, an effective way is spend less than you earn. However, it may be very hard for us nowadays not to spend the money we have not earned yet with the help of credit card and interest-free loan. There is one risk when you spend money you have not yet earned that you might end up not being able to pay your credit card in full at the end of the month. Does that mean you should not spend more than your earn at all when it comes to emergency? Of course not. If situations like having to buy home appliances or equipment occurs, you can lay-by system where you can put down a deposit and pay the rest with installments. For example when you really want to purchase a modern, expensive and brand-new furniture, you can think twice if there is an alternative like buying antique reproduction furniture instead.
2. Know How Much you are spending
There is no way you can manage when you don’t know how much you are spending. You can’t manage what you can’t measure. To start manage your finance properly, you need to know what you are spending and what you are spending on. Very few people of us can actually confidently tell how much they spend on groceries, bills and entertainment. To keep a track of what you spend, use a spreadsheet or an online spending tracker application to measure your outgoings. You will know whether you spend more money than you should on one aspect, and you should relocate your money or not. Continue doing it for a month or so, you will be surprised by the results.
3. Sleep on It
Do you have moments when you want to buy a new car, a sexy dress or a new lounge suit? A proper way to manage finance regarding big-ticket items is to take some time and sleep on it. People who are going through breakup tempt to seek comfort through shopping as well as eating, and it is stated that people tend to spend serious money when they are emotional. You wonder why in some big auctions buyers use buyer’s advocate or agent to bid in order to get affected by their emotions and make the wrong decision. You are usually able to think with a clear and rational head after sleeping on it, which allows you second chance to think if you really need it and if you can afford it, also it prevents you from making the wrong purchase you might regret.