Financial management

FINANCIAL MANAGEMENT IN A FAMILY

Key points

  • Money management is about meeting expenses, setting aside money for emergencies, and saving for the future.
  • A family budget helps you spend and save wisely.
  • The key to budgeting is spending less money than you earn.
  • When you spend less than you earn, you can start saving money.
  • Good money management can help you enjoy family life

Money management can put you in control of your money, which helps you reduce stress and feel more secure. It lets you enjoy family life, rather than worrying about your finances.

Communication in your family plays an important role in managing money well. Honest conversations with your partner, if you have one, can help to reduce conflict about money. And involving children in planning and budgeting can make it easier to achieve savings goals together.

A family budget: why it’s a good idea

A family budget is essential to managing your money.

That’s because a family budget helps you:

  • spend your money wisely on the things you must have – these are your needs
  • save money for the things you like but can live without – these are your wants
  • save money for your family’s future – for example, preparing for another child, buying a house or investing
  • set aside money for unforeseen expenses – for example, if your car breaks down and needs repairs
  • stop accidental overspending.

Working out how much money you need for everyday essentials like food, housing, utilities like gas, electricity, phone and water, transport and medical services can help you work out how much money you can set aside to cover unexpected expenses, save for the future and buy things you want.

Budgeting can help you and your family take the first step towards control of your money. It can also help you avoid debt

Getting started with budgeting

The key to budgeting is sticking to a basic rule – spend less than you earn.

One way to start budgeting is to list the:

  • money you have coming in
  • things you spend money on
  • things you owe money on.

It can help to look at past salary statements, benefit statements, bills, bank statements and credit card statements.

Try to look at enough bills and statements from the past year to understand your usual earning and spending habits. It’s good to look at how some bills are higher at different times of the year. For example, energy bills are often higher during winter because of heating.

Be sure to include all the ways that money is coming in and going out.

After you’ve accounted for essentials and emergencies, your aim is to have money left over to save and spend on things you want




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