The ability to rationally plan expenses, account expenses and control purchases will be a real salvation for those who do not know where the money goes, how to manage the family budget and why it is necessary.
There are three basic types of family budgets: joint, when all sources of income are combined and spent by all family members; separate, when everyone disposes of his income as he wants, and general purchases spouses make together; mixed, when the income of each person is divided into common and personal parts.
Determining which type is more convenient and optimal for the family is also part of financial literacy. You can try different options and see what will suit all family members. Having an idea of financial planning is worthwhile for both spouses: this makes it easier to agree and understand each other. If two people are trying to optimize their expenses together, they will do better than one person.
In order to manage your budget intelligently and efficiently, you need to keep track of your income and expenses. This item is the first and the main one, it can be called the basis of financial planning. It is important to keep track of what the money is spent on. Accounting will allow you to understand how much is spent on household chores and mandatory payments, and how much is spent on optional items.
Properly managing expenses means, first of all, taking into account important expenses, without which you cannot live comfortably. These are utility bills, grocery and transportation payments, and other mandatory items. If there are any obligations to banks, their priority should be as high as possible, at the level of utility payments. If you pay your loans on time, you can avoid unnecessary expenses associated with arrears and penalties. Only after the mandatory items have been paid and budgeted for should you think about optional expenses.
Many people think that saving money simply means spending less. That’s not entirely true. Sometimes chasing items that are too cheap can, on the contrary, increase costs. Sometimes it is better to buy a slightly more expensive model of washing machine, but reliable and with a warranty. Or you can wait for a special offer and buy it at a significant discount. The ability to take these things into account is financial literacy, the basis of smart budgeting.
If a person knows how to manage his finances wisely, even a credit card can help him save money. Often banks offer cards with extended cashback and a long grace period, that is, a period during which you can return the money without interest. If you keep track of such offers, read the terms carefully and use them at the right time, you can spend even less than with an ordinary debit card. The main thing here is responsibility and care, and on the part of all family members.