8.28.2018

Top 5 Tips for Your Household Budget






Improving your household budget is not a complex matter. However, a surprisingly large number of people fail to do something about it until it’s too late. The procedures you’re supposed to use may be fairly standard, yet, this is something that a lot of people aren’t accustomed to, which makes the whole procedure a tad more problematic. With that in mind, here are five simple tips to help you out.
Track your spending
The first and the most obvious thing you want to do when you start budgeting is to track your spending. Nowadays, with the help of so many different personal finance apps, this is easier than ever before. Most importantly, they operate in the cloud, which means that you can easily share this data with others. Even if budgeting is seen as your own responsibility, perhaps it would be better if you were to share some of it with the rest of the family. This digital hyper-connectivity may make this idea somewhat easier to pull off.


Make an emergency fund
Every household needs an emergency fund. However, it’s the size of this fund that’s commonly debated. According to the opinions of the experts, this fund needs to be at very least big enough to cover three months’ worth of your expenses. So, if, for instance, you need $2,000 to make it through the month, your emergency fund should be at least $6,000. Still, this is the minimal size of an emergency fund, so feel free to set the bar wherever you feel is right.
Diversify your portfolio
Once you meet your emergency fund goals, you’ll have to choose what to do with the excess money. While setting up a savings account might seem like the logical next step, it would probably be for the best if you were to invest. Making a choice of where to invest is a topic that deserves a post of its own, yet, most financial advisors agree that putting all your money in a single place isn’t the brightest of ideas. This is why you should try diversifying your portfolio. Invest in local small businesses, real estate and stocks. While you’re at it, use at least 20 percent of your investment money to buy precious metals. In a moment of crisis, having silver bullion as an asset may make a huge difference.
Gamify saving
Setting money aside is something that’s much easier to pull off once you manage to gamify this experience. One of the simplest techniques out there is the famous 52-weeks savings plan. The way it works is very simple, you start by setting aside a certain amount (let’s say $1) on the first Monday of the year and putting it in a jar. Next Monday, you put $1 more ($2 in our case), while a Monday after that, you place $1 more (this time $3). In the above-discussed scenario, where you’ve started with a $1 investment, by the end of the year, you should have $1,378 in the jar. Of course, there’s no reason to start at a sum as modest as $1.

Set a long-term goal
While amassing wealth is a worthy goal on its own, it’s a poor motivator. Think about it, it’s much easier to work and set money aside when you have a clear vision of a purchase or an investment that this money is going towards. So, start setting long-term goals. For instance, upon reaching a certain cap, you might treat yourself with an overseas voyage, replace all the windows on your home or make a purchase of a new car. It all depends on your personal dreams and aspirations.
The biggest problem with improving your household budget lies in the fact that you’re not the only one with the access to the bank. This is why you need to start by making sure that everyone’s on board and that everyone’s on the same page with you. Once you get this out of the way, you’ll have many options to work with.



Post a Comment

Thanks for the blogging Love

© Take A Walk In My Shoes. Design by FCD.