Household finance is more about everyday money management and a lot less 'sexy' than some other types of high-flying financial advice available. It is because that much of it is common sense - things that we already know (but fail to put into practise!) - that it isn't headline material. But the truth is, poor household financial management can be at the core of a family's financial problems. I know from personal experience, It's hard to sit down and create a budget and to stick to it! It's hard not to pull out that debit card when you see something that you just "have to have."
Because people generally stay with the same employer over time, and their wages remain constant, it is possible to prepare a budget that is manageable. Most household finance expenses do not fluctuate very much from month to month. Of course, from time to time, we might need new tyres on the car or a new washing machine - by these larger expenses can be averaged over a 3-5 year period and be included in your budget.
With Realtors and other Independent Contractors it's quite different, you may receive a check for $2,000.00, but may not know when your next income check will come. That can be very frightening and cause a great deal of stress in your life. A budget will help to alleviate some of this stress.
The trouble is that most families just can't be bothered, or are afraid to, honestly analyse their income and expenditure. This can often result in, with the help of credit cards, more money going out than coming in. When this is the case, the ability to repay the debt diminishes and the household finance budget spirals out of control.
Importance Of A Budget for You and Your Family
When your household budget revolves around a family, it is even more important. Preparing it will take time - but consider it an investment in your future financial security. Because your decisions will impact your family's future, it is even more important to get it right. The larger the family, the more important it becomes to have funds on standby for emergencies. Without a good financial plan, living payday to payday will become a risky way of life.
Smart money management is much more than merely making sound spending decisions. It involves of course, planning a budget, limiting or cutting expenses, and, very importantly, putting a specific amount away each month to a dedicated savings plan.
Be mindful that simple errors on the part of a sales assistant or your bank can impact on your budget. Examine every transaction and receipt carefully.
Having your wages paid directly into your bank account, and withdrawing funds as they are needed (subject to bank charges for small withdrawals), and having a nominated amount moved to a untouchable savings account, is a good start.
Once you begin spending to your budget, you will be amazed at the things you would have previously opened your wallet for. Do you need to buy a newspaper everyday (read online!), or that cappuccino on the way to work (would 'instant' at work really affect your lifestyle??), and instead of fast food for lunch, why not take some leftovers from home? Small, steady changes in your spending habits will have a huge impact on your household financial budget - and there is no time like the present to start!