Family Budget
Budgeting is not only important for Institutions but also for Individuals. It is always right to Keep a Spending & Savings Plan for Your Family. and is good to revisit the Plan periodically or when a Major shift occurs in Your Income and expenses.
Family First
Life is full of Uncertainty and we can effectively overcome this situation with Proper Planning to a certain extent. Budgeting your family Expenses will help you to oversee the events and avoid last-minute risks. Would you agree all the day-to-day activities of our Life are related to a system of economy and we are part of it!? That is an action that either intentionally or unintentionally makes us a part of this system. To make you clear with an example of Brushing or Bathing, think about how we are connected to the system like - manufacturers, laborers, suppliers, retailers, Taxes, and so on. We do Just Bathing or Brushing, but we are in a networked economic system. As this system works with proper budgeting and control, why do we the part of It, not make a system of our own with proper control over the budget?
Usually, there a five Level steps used by experts to set a Budgeting Plan for Family needs which can be followed with ease which makes you and your family competent in situations.
Step 1. Determine Your Income
To Create an Effective Spending and Savings Plan, You need to know exactly how much money you are bringing in each month. Calculate your Monthly Income with Paychecks and another source of Income you receive regularly. Please use your net pay rather than gross pay as net pay includes taxes and other allocations.
Step 2. Track your Expense and Spending
You can track all your expenses and spending. Some will be recurring and some will be static for a year such as Local Taxes etc. Tracking your spending will help you to pinpoint areas where overspending happens and stop the drainage of money. Once you have written your track you can move to the next step.
Step 3. Set Your Financial Goals
Now you get to look at your present Financial Situation and habits, you can decide what Financial Goals you need to achieve in the future and what you want to be after several years. Sometimes your Track report is not capable enough to have the Financials to build the Future you want. Don't get upset or give up, dare to write your Goals. Once you bring a habit of Tracking your Financials and your Goals, Slowly you and your financials will start Growing.
Step 4. Decrease Your Spending or Increase Your Income
At this step, you along with your family must find solutions to - 'Decrease Your Spending or Increase Your Income'. Several checkpoints can be implemented with the help of your family and will certainly improve your deficit by finding another source of Income by doing some passive income sources, applying for Promotions, Job Shifts, Home-based businesses, etc.
Step 5. Turn your Savings into Inflation indexed Investments
It is imperative to turn your savings into investments that will check inflation. Your Investment Basket must be filled in the way
a. Traditional Investments - This will give consistent Returns and Convenience.
b. Inflation Investments - Such as Mutual Funds and Equity
c. Insurance - Both Life and General
d. Pension Plans and Annuities
How Inflation Eats Your Savings
