7 Frugal Tips for Managing Your Household Finances

Of course, when it comes to household affairs, it can’t be separated from financial matters. Managing your home is not an easy task. Of course, we need other ways to manage our family well so that we can meet the needs of all the family.

In addition, there are many factors that affect the family. Start with the basic needs that must be met for wants or additional consumption or recreation. The reason is that taking care of a family is not the responsibility of just one person. Both husband and wife have a very important role in running a family.

The size of the salary often affects how the family is run. It’s not unusual, but you can avoid budget deficits. Especially if the husband or wife’s income includes bonds, which is a fixed monthly salary because daily needs often fluctuate.

Of course, for those with low salaries, it can be difficult to save for things like emergency money, school fees, severance pay, and buying a car. No wonder we run out of money in the middle of the month. This may happen. The reason is that husbands and wives cannot manage their monthly salaries properly to meet the family’s financial needs.

In fact, there is no clear formula for managing household finances. So, how can we manage our family finances well so that we don’t waste it? This time, dMagazine.me will help you provide family management solutions. Check out the instructions below on how to manage your family budget so you don’t get lost.

Here are 10 Frugal Tips for Managing Your Household Finances

1. Calculate all incomes and spouses

To effectively manage a household, the way to manage a household when your spouse works is to calculate the entire income of you and your spouse for a month. Income here includes not only monthly salary, but also incentives received when receiving overtime money during investment.

This is important so that you and your partner can divide the needs that must meet your income distribution. Keep in mind that the first meeting is the primary need. Calculating all your income makes it easier to manage your family budget.

2. Create a detailed budget

Wishes are not always needed by you and your partner, but when you spend money to fulfill wishes, there is a high chance of household waste. The best way to spend a small amount of income is to use a detailed written budget to plan your monthly expenses.

How do you manage your money in a month? You and your partner can spend the money you earn according to the plan you and your partner prepare. When it comes time to buy what you need, you and your partner already have a budget. However, the remaining funds are intended for other needs and should not be used outside the allocated budget.

3. Determine family financial priorities

Then determine the family’s financial priorities for the month in the form of a priority list. This list will help you and your spouse to run your household effectively. By making a priority list, the allocation and spending of family money will be more organized.

Furthermore, household expenses that are included in the priority list include daily meals, kitchen, electricity, water, transportation, school-age children’s education, and car and house payments.

This priority list not only helps you manage your household but also serves as a reminder that you should fulfill your priority needs first. When these are sufficient, you can allocate them to secondary and tertiary needs.

If you and your partner are still struggling to create a prioritized list, you can start by planning a written monthly budget. Divide the list of expenses into two parts. In other words, primary and tertiary needs.

Basic needs include food, transportation, electricity, water, telephone, rent, motorcycle, car and more. Tertiary needs include clothes shopping, traveling, and a budget for socializing with friends and colleagues.

Planning a shopping list here is very efficient as grocery shopping will be much cheaper. Not only should you get used to budgeting your monthly spending plan, but you should also get used to the financial budget you make with your partner.

4. Record all expenses in detail

You and your partner need to record detailed financial courses in a book for tips on organizing and managing the household, and how to manage it so you don’t get lost. This starts with income, expenses, balances, and all forms of budgeting. This will ensure that your funds are properly monitored and should be recorded in as much detail as possible.

Even easier, the recording method can be organized in the form of a table, just like accounting bookkeeping rules. If you are confused, you and your partner can look up examples on the Internet. This step applies to all your income amounts as a way to manage your household with 2 million, 3 million, 4 million, 5 million, 7 million and even more of salary.

5. Preparing a financial position for emergency financing

It is always said that in some areas you need to save money and cut costs, but that doesn’t mean you don’t have an emergency fund. Emergency financing is one of the most important concepts for families to think about.

Like savings, this advice prioritizes the reuse of own money. Think about it for future needs and health. You can also do this by securing certain financing. It doesn’t have to be large, but constant.

Do this regularly and with discipline. This way, one day you will not be confused by an emergency having money for other needs. Basically, it cannot be denied that controlling the financial cycle becomes more difficult when you are married. Family needs increase along with expenses. Therefore, you should try to be wise in saving, limiting expenses, planning shopping needs, and allocating funds.

If you are confused and still can’t apply, save a portion of your and your partner’s monthly income for emergency financing in a way other than your basic needs. The amount is relative and can range from 10 to 30 percent of your monthly income. The funds held each month are for emergency funds that are only used occasionally or in emergencies.

6. Maintain your debt ratio and make sure it is less than 30% of your income

The best way to organize your family so that it doesn’t become a luxury is to avoid debt. This is because bills and debt obligations can be a burden that can confuse families. But inevitably there are many factors that make you and your partner get into debt.

The solution is that if you need to get into debt, use it to fulfill basic needs but that cannot be met in the near future. For example, a mortgage. Beyond that, you should avoid debt.

It should also be noted that all that needs to be done to manage good finances is to maintain a debt ratio. You can ensure that your obligation to pay debt bills does not exceed 30 percent of your income. Beyond that, the family will definitely be at a loss.

7. Separate savings and investment funds

In addition to allocating income for reserves or emergency funds, you and your partner should also allocate income for purposes other than daily needs. For example, expenses for savings, insurance and investment. These three things are included in how you manage your money so that it doesn’t get lost.

All three also have many advantages. Savings clearly help in meeting current and future needs. Income saved with savings can be used for daily expenses and urgent needs.

Insurance itself has the advantage of protecting you from medical expenses. Investing is usually used as a long-term savings, so that you don’t run out of money just like that. So what are the benefits? The benefits of investing can secure your life until old age.

There are many ways to save, insure and invest in running a household. When deciding to save, you and your spouse need to understand where the best place to put your money is – a bank. Saving in a bank and its benefits also ensure the safety of your money. Not only that, saving in a bank makes it easier to monitor and control your financial spending.

Aside from credit cards, make sure you and your partner can use paylater wisely, not for consumer needs or for paylater use, because they want to shop rather than important needs. Paylater is the same as borrowing, you and your partner still have to pay it back and try not to procrastinate on your debt.