How to Manage and Balance Your Family Finances with a Single Income Stream
The world has changed so much within the last few decades, so much so that it now takes multiple streams of income to manage and balance household finances unlike what we had in times past. Expenditures in the form of taxes, transportation, secured loan repayment, daily feeding, education and even relaxation eat up huge bulk of family finances today. Thus, you are probably always asking yourself questions like; “how many jobs do I need to manage my family finances?”
However, you do not necessarily need multiple streams of income to keep up with your family expenses. All you need is a simple financial strategy that will help you to balance your household finances even with a single income stream! Highlighted below are simple but effective financial principles that will help you manage and balance your family finances with a single stream of income.
Make a budget for your monthly expenditures.
In doing this, you need to first of all know how much you spend in expenditures on a monthly basis. You have to highlight all your expenses for a month in a descending scale of preference; from the highest priority to the least. Then, you allocate how much each item eats up from your income. Make sure to give higher priority to necessities and needs, that is, items such as housing, food, electricity, IVA debt payments, transportation, water and so on. You can then allocate a portion of whatever amount is left to items of lesser priorities such as; entertainment and relaxation. Be as frugal as possible in your allocation to less important items. Be specific and deliberate about your budgeting. For instance, know what exactly you want to apportion money to under items such as entertainment. Is it going to the movies? Or a spa treatment? It is important to break down the items of your expenses to their last atoms. Your monthly budget may look like this:
- Housing: 24%
- Food: 17%
- Education: 16%
- Transportation: 8%
- Electricity: 5%
- Savings/Investments: 12%
- Clothing: 5%
- Miscellaneous: 5%
- Entertainment: 8%
Communicate effectively with your partner.
This is pretty simple and easy. Keep an open communication line with your spouse. Make sure to carry your partner along in the making of your budget and allocation of resources. Agreement between both parties is important, after all, two heads are better than one.
Avoid spending on unnecessarily to avoid debt
Now, this does not mean you would not spend on things that make you happy. It means you just have to be really picky when it comes to your purchases. You have to practice the art of discipline and self denial; learn how to recycle things rather than buying a whole new one. You don’t have to get the latest gadgets or wear the trending fashion; be contented with a good cheap phone that can carry out your day-to-day activities. Also, do not purchases goods on credit! It’s a risky line that you do not want to cross especially if you don’t want to drag yourself into a situation where you begin to look for ways to stop bailiffs. Make sure you pay off all debts and avoid taking up any again as much as possible. One financial trick to follow is this: whenever you have a strong urge to buy something – a new shoe, a new iPhone – hold back for about seven days (or more). If you still feel the urge to buy that item, then you may proceed or hold back a little more. But if you still find yourself incurring debts due to your spending habits, then you can always count on a debt negotiation scheme like IVA Scotland using its digital tool – IVA calculator online – to help you when your debts become too burdensome.
Do not spend to impress.
Remember, “the goal is to be rich and not to look rich”. Therefore, the urge to impress others by dressing luxuriously or going on websites like My net Research to make funeral plans ahead of time, or spending flamboyantly is one you have to suppress if you want to manage and balance your family finances. You already know your value; so do not get caught up trying to “prove” your worth to others by having “the perfect” car, house, or outfit. Know your financial value and do not extend your spending limits in the name of “pleasing the society”.
Invest in yourself!
This last step is just as important as every other step. Self investment is pertinent to an effective management of family finances. Budget resources for learning more and educating yourself financially. You can do this by attending business conferences and seminars, purchasing and reading financial books, watching business videos and even enrolling for online classes. By doing this, you would be priming and training your mind to practicing better, advanced and highly effective financial principles.
In all, managing and balancing your family finance with a single stream of income may seem herculean. Nonetheless, it remains possible. All you need to do is follow the simple strategy outlined above with consistency and discipline.