Many budget-conscious families are working with a lower income than meets their needs or wants. Not having a lot of extra income to manage doesn’t mean families should put off financial planning until a later date.
In fact, financial management is even more important in families that aren’t bringing in a high income. Financial management has nothing to do with the level of income; it relates solely to living habits. With good financial management methods,families can save some money even without a high income.
1. Record income and expenditures
You can see where your money comes from by using an income and expenditure template, easily found online. It records your weekly income, including spousal income sans child benefits. After an overview of your family’s income, you can explore the potential for increasing income through other methods. It is also necessary to make spending budgets and to develop the habit of keeping accounts. Looking at where you spend your money can help you find out which expenditures are necessary and which are not. Through simple bookkeeping, you can get your living costs under control.
2. Find a part-time job
Financial management is all about increasing income and reducing expenditure. Taking up a part-time job is a good way to increase family income. Maybe write yourself an appropriate resume and be prepared for any opening. Usually, the salary of a part-time job is not high, but it can help. If you want to work for yourself, you can go to Freelancer or Flexjob and find yourself some odd jobs.
3. Invest prudently
For budgeting families, making necessary investments is essential for financial management, but always investigate before you invest. You should choose an investment with a high rate of return and be aware of the risk it may bring you. The most important thing is to give continual attention to the investment’s risk. Make your investment according to your family’s economic level and your knowledge of finances to make the most of your investments.
4. Make a monthly shopping list
At the end of each month, make an inventory of things you should buy for the next month, such as clothes, foods and daily necessities. Make a list every time you go to the market, so you aren’t buying things you don’t actually need. Go to different stores to check the prices. For example, you may find a supermarket that sells fresh but relatively cheap beef. Allocate certain budget amounts to each type of spending. This habit can effectively avoid blind purchases.
5. Buy insurance
Purchasing health insurance and accident insurance can help reduce the loss brought by accident. Try to purchase health insurance that covers major diseases, accident insurance and medical insurance of hospitalization costs. Most family expenses are related to child education and daily necessities. The proportion of insurance costs should be no more than 10 percent of family income.
6. Watch out for excessive debt
You may be in debt for a certain reason, such as buying the latest iPhone 6s. At that point, you must record it and work out a plan to pay your debt. Making records can help you recognize your financial situation and avoid being surprised by your debt.
7. Learn some basic repair skills
General knowledge of maintaining mechanical objects and household appliances can save you money. Be sure you have some basic maintenance tools, like a wrench, screwdriver, axes, saws and nails. If there are small problems with electrical appliances, machinery or furniture, you can repair them yourself. Making repairs yourself can save you maintenance costs and increase your knowledge.