Household money management tips

Household money management tips

Money. Hard to get. Easy to waste. And how is your money management? Do you live pay check to pay check or you manage, you save and you invest? It is not about how much you earn, but how good you are with managing it! First, you have to understand that the success to manage your money depends on you. So sit down, analyze your expenses and set up your household budget!

Understand your expenses

Calculate all your monthly expenses towards bills and groceries (see the chart below). Check your statements and try to remember how much you’ve spent this month on food, fuel, cloths… Everything. Group all your expenses and add them up. Surprised? Is there anything you could do with these hundreds of dollars of money leaks per week?

understand household expenses to better manage money

Money leaks

Money leaks are the least visible and conscious expenses. Here are the most common and the easiest to avoid money leaks:

  • buying on impulse
  • wasting food
  • buying fancy-labeled ones instead of off-brand products with the same quality
  • buying lunch at work every day and dining out frequently
  • paying late bills and mailing them
  • paying for cable channels you are not watching
  • not saving energy
  • taking $20 every day from ATM just for cash in the pocket is a $100 a week, $400 a month, $4,800 a year!! Look at your statements!

Financial mistakes

Financial mistakes are decisions you make about your money that are ruining your financial stability. The most common financial mistakes are:

  • being unconscious of spending, especially with credit cards
  • fees: maintenance fee for checking, out of network ATM fees, credit card annual fees, late fees
  • debt. Do you know that credit card debt is one of the most costly type of debt? An average American has $9k credit card debt! With the interest rates as high as 20% it means that you could be wasting about $1,8k a year!

Household budget

Now that you understand how much you need for your household expenses, you see your money leaks, you took decisions to avoid financial mistakes, you can set up the household budget. You have this amount of money for bills, groceries, cloths, etc. So stick to it! Always write down every expense and monitor how much you have left for this type of expense in this month’s budget. Maybe it is out of budget to order food anymore. Can you give it up? Or you will have to cut on cloths expenses if you had to tank you car once more this month. But if you don’t want to change your life, don’t even bother trying out these financial tips. You have to want to make changes. And remember, it has to be the family budget. You can’t stay on budget and have your spouse blow it. You both have to follow the money management rule. And set a good example to your kids; teach them manage money. It will pay off to you and them in the future!

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