Family budget: how to calculate, earn and save

If you are wondering about managing a family budget, it means you care about the financial future, harmony and mutual understanding in your family.

Disputes about money are often a source of contention in husband-wife relationships and a popular cause of divorce. We are convinced that with a competent approach to family budget planning, you will eliminate financial problems and be able to achieve your goals together.

Let's look at life hacks, using which you can solve all financial issues in the family and show you how and where to conveniently keep track of your budget. Go!

Types and features of the family budget

There are several options for drawing up a plan for the distribution of family finances. Each has its positive and negative sides. Taking into account all the factors, you can choose the best option for a particular case.

Types of personal and family budget

Personal budget

A personal budget assumes the earnings of one person living independently, which he can dispose of at his own discretion. In this case, everything is simple, because the person himself decides where to spend the money, what to save for, and so on.

Separate budget

When a person begins to live with a partner, be it just a loved one or already a legal spouse, sooner or later a number of the following questions arise:

1. Is it necessary to combine a couple's income into common income?
2. Should you leave pocket money to each partner?
3. Who will keep track of family expenses and income?
4. How to plan large joint purchases?
5. What share of the family budget is allocated to each partner?

A separate budget is a model of behavior for young people who have just started their family relationships or are just dating. Each representative of the couple should have his own income, approximately comparable to the income of the partner. The decision to spend money is made independently. Usually, when living together, young people spend money on living in half or take turns. For example, food costs and utility bills are paid in half, but entertainment and shared leisure are paid in turn. At the same time, it is not necessary to have a clear understanding of your partner’s earnings.

Separate budget

Example

. Vyacheslav and Ekaterina started living together just a month ago. The young man is a professional photographer and works in his own studio. Ekaterina is a leading manager in a large company, but Vyacheslav’s income is almost 2 times higher than her earnings. The couple decided to maintain a separate budget for the first few months in order to gain some experience and, based on the knowledge gained, form a model of family life. They pay the rent in half, but Vyacheslav pays for entertainment and leisure. Groceries in stores are paid for in turn; everyone buys all personal items in the form of clothing, hygiene products, etc. for themselves. Vyacheslav has a car purchased on credit, which he continues to pay off.

This budgeting model is perfect for couples who have just started living together or those where each partner has a consistently high income and for a number of reasons they have jointly agreed not to combine the budget. If one of the couple earns much more than the other, or the second does not have his own means of livelihood, such a model of family life will certainly cause conflicts and misunderstandings.

Joint budget

A joint budget is usually understood as a model in which all family income and expenses are considered jointly. This type of budgeting is considered classic, and it came from a traditional patriarchal family. Each family member sees all the receipts of funds in the general budget. The spouses know which of them, and most importantly, how much, brought into the family; they jointly plan future expenses, negotiate and bear equal responsibility for any action regarding the budget. Modern marriage legislation in many countries, including Russia, provides for joint ownership of family benefits and property on a parity basis.

Joint budget

Example. Nikita and Tatyana got married 4 years ago. Most recently, the couple had a child and Tatyana went on maternity leave, while Nikita continues to work as a mid-level manager. The couple lives in their own apartment, which they acquired through previous savings and receipt of maternity capital. For the most part, maintaining the family budget fell on Nikita's shoulders, but Tatyana also takes part in this. The couple has 2 credit cards, which they linked to a common personal account, which they use to pay in stores. They considered this method extremely convenient so that debit cards would not appear again and miles would be accumulated for travel, points and bonuses. Nikita's salary goes in full to a completely different account. At the end of the grace period, he pays off the credit card debt from his salary so that no interest accrues. When cash is needed, Nikita withdraws it from a debit card.

A joint budget will be the best option for those families where one earns a lot and the other earns much less or has no income at all. In this case, pooling makes it possible to equalize the rights of both. A shared budget is a good test of trust in each other.

Partially separate budget

Many people believe that this type of family budget management is ideal. The couple allocates some part of their income for general expenses and housekeeping, and everyone keeps the remaining money for themselves, having the opportunity to spend it at their own discretion. For example, a woman spends her personal money on shopping and beauty treatments, and a man on a car, gym, etc.

Partially separate budget

Example. Vladimir and Svetlana have been married for 15 years. They have two adult children. The husband works as a leading engineer, and the wife works as a private massage therapist. Both partners know exactly each other’s income and at the same time, they agreed to contribute 75% of each of their income to the common budget. The rest can be spent on your needs. From the general budget, money is allocated for food, utility bills, medicine, child support, etc. Vladimir uses his personal money to pay for boxing training, maintain his car and purchase fishing gear. Svetlana buys herself books, handicraft kits and visits beauty salons. If the total budget is not enough to purchase any major purchases, the spouses add funds from their personal money.

A partially separate budget is suitable for those families in which partners have hobbies or hobbies and it is easier for them to communicate and not take into account spending on personal preferences.

We determine sources of income

To determine the source of income, find out permanent and periodic income, what part they make up of the entire budget, which source of income works without your participation.

Basic income

Basic income is the basis for building a family budget. For most, their main income is wages. It is stable, periodic, and it is convenient to plan on its basis.

Additional income

We contribute to additional income:

• periodic part-time jobs;
• interest on deposits;
• cashback;
• bonuses;
• income from rental housing.

Variable income

Fixed income should not be included in the general budget. Tax deductions are a clear example of non-permanent income. Put it in your savings account right away and create a financial security fund. Or use it to pay off large loan debts.

Choosing a suitable family budget model

Before making a decision on choosing a family budget model, you should base it on 4 important questions, namely:

1. Who will be responsible for accounting for funds and who will manage them fully? If the role of the main financier in the family has already been determined, then it is advisable to create a general or partially general budget. With this model, one of the couple will know everything about income, expenses, family needs and all movements of funds. If no one from the family wants to account for finances, much less report on their own expenses, they should choose a separate budget.
2. To what extent are the couple open to each other about finances? If you don’t want to tell your partners about your income and level of expenses, the choice should fall on a separate budget. When young people begin to get closer and closer together, it makes sense to create a mixed family budget.
3. Do the couples have common expenses and what is their share for the man and the woman? For example, if each of the partners has a good income, their own car, and they take on any expenses themselves, then the importance of common expenses decreases. In this case, there will be no need to create a general budget.
4. How stable is the family income and what is its structure? If one spouse has a small or unstable income, it is best to create a joint budget. Thus, both parties will see an unstable situation, thinking in advance about how to close the gap in finances. In another case, a partner who has no problems with income may not be ready for the fact that there are too few funds in the family budget due to the problems of the other half.

conclusions

Proper planning of the family budget allows you to productively use available income without exceeding the amount of expenses. It is best to create a table in Excel in which income and all expense items will be recorded. It can be printed and duplicated in a smartphone application, which will allow you to quickly track all expenses.

It is imperative to leave part of your income in an emergency fund in order to be able to finance unexpected expenses. But you should not take out loans or debts, since this will not only not help the budget, but will also worsen the financial condition of the family.

In addition to the article, I suggest you watch the video:

Minimizing risks for any family budget model

In families where a common family budget is preferred, each person should know about their financial situation and the financial instruments used. It is important to have a bank deposit that will provide a safety net in case of the sudden death of one of the spouses. In this way, you will be able to instantly receive your acquired deposit without waiting for the inheritance to be formalized.

If the family has a separate budget, then the couple must agree on the optimal credit load and the amount of investment with a certain risk. This is especially true for those who live in a civil marriage. For any type of family budget, it is worth making sure that both partners (or at least one of them) take out life insurance. This is especially true for those who do not have a stable income or savings, or whose deferred funds are less than the family’s expenses for six months. In this way, it will be possible to maintain the financial well-being of the family even in the most difficult times.

Until recently, Russia largely adhered to the general family budget. Due to the spread of civil marriages and open relationships, couples are increasingly choosing to manage financial expenses separately. Whatever type of family budget is chosen, it is important to determine general financial goals, take into account the level of income and the required level of expenses, think over a plan for protecting against possible risks, and draw up a separate plan to achieve any goal. At the same time, it does not matter at all whether this plan concerns the entire family as a whole or each individual member. It is important to note that with a regular income of the couple and constant replenishment of the general budget, financial problems and disagreements arise much less.

Secrets of planning for irregular profits

At the moment, there are more and more people who do not have a regular income, but for them, planning a family budget is necessary. Several methods are suitable for such families:

• calculate the average income over recent years and work with this figure;
• from the approximate monthly income, wages are allocated, which will be used for mandatory needs, and the remaining funds are sent to the reserve balance;
• maintaining two tables - you should determine how much the family earns in good and bad months, and then calculate the budget based on the income received.

Ways to form a family budget

It is necessary to clearly understand what amount comes regularly, where it comes from and what costs need to be incurred. It is effective to write out each item separately. If we talk about income, then this is:

• salary or income from individual entrepreneurs;
• income from property, if any;
• earnings on deposits;
• social benefits in the form of pensions, insurance and other things;
• help from relatives.

Methods for forming a family budget
The classification of expenses is very diverse. It’s worth looking at the simplest of them, where costs can be divided into only 6 groups:

Provided by SendPulse

• mandatory payments (medicine, mortgage, etc.);
• Food;
• purchase of durable goods (furniture, plumbing, transport);
• payment for services (beauty salons, gyms, transport);
• communal payments;
• leisure and household needs (restaurants, cinema, cafes).

The result is a fairly clear approximate picture of the financial scheme in the family. If you want, read several books on this topic.

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Budget

A budget can be considered balanced if the level of income coincides with the level of expenses. From the outside it seems that this situation is quite normal. With the best options, the family spends as much as it earns, but at the same time it will no longer be possible to save anything. However, when the family’s income is 80,000 rubles, and 50,000 rubles are distributed towards debts, it’s time to do something. With such problems, it is difficult to think about possible savings and plans for the future.

When expenses are much greater than income, the family experiences a clear shortage of money. At the same time, you can prepare for quarrels, misunderstandings and other problems. To begin with, it is worth understanding why this situation occurred; in addition, you can read the book by D. Clason entitled “The Richest Man in Babylon.” The book can highlight the most basic laws of wealth and the possibility of getting out of poverty. The book has a pleasant and understandable narrative that even a schoolchild will understand.

Prepare for quarrels, misunderstandings and other problems

If the situation is exactly the opposite and income exceeds expenses, then in this case there is accumulation or excess. This situation is considered favorable, because family members have the opportunity to save money for large purchases, travel or education. When creating a so-called “airbag” you can feel calm and comfortable. If you experienced unexpected and unplanned expenses in the past month, this is not the time to get upset. To understand your financial situation, it is better to take into account income and expenses for the last six months.

Maintaining a budget with earnings in different currencies

Maintaining a budget in several currencies is convenient for those who live in several countries and spend their earnings in several currencies. For example, if people alternately live in Russia, China and Thailand, you can add several columns to account for different currencies. In addition to the Russian ruble, the yuan and baht are noted in the columns. If family members earn money in rubles, they will have to be exchanged periodically. When a person loves to travel and visit different countries, keeping track of their budget becomes even more difficult. It will be easier to count money in dollars or any other single currency. When transferring currencies, do not forget about commissions; this factor should also be considered an expense.

Several reasons to open a family account

Money by itself cannot make a person happy. I am pleased with the opportunities that money gives, a sense of independence and enjoyment of life. A useful financial tool is a joint bank account. Managing a family account that will give you confidence in the future and ensure good relationships with loved ones is considered a valuable skill. It is worth considering in more detail the advantages of opening such an account.

1

Opportunity to agree with each other

What should I do, should I divide the budget between the couple, live off the other’s earnings, or create a common financial fund in the family? Each young couple chooses their own acceptable method. The main thing is that the chosen approach suits all family members and none of them feels disadvantaged. After all, even the smallest purchase in the form of tights or lipstick and endless begging for money for it will sooner or later drive everyone crazy. For this reason, the famous psychotherapist from France Jacques Salome considers the most optimal family budget model to be one in which there are joint savings and individual pocket money.

Family and happiness

For example, you can open joint accounts in a mobile bank. This will allow you to create the most ideal scheme. You can immediately link the cards of both spouses to such an account in order to transfer personal funds there and replenish the family treasury. From such an account it will be extremely easy to pay for any family expenses, be it a trip to the theater, a restaurant, payment for fitness or repairs. Opening a joint account indicates that the partners completely trust each other. At the same time, a joint account is an excellent occasion to discuss each other’s desires and hobbies in a calm atmosphere, as well as to draw up a plan where immediate wishes and dreams will be noted.

2

Helping your child manage money

Pocket money for a child is not his salary or a way of rewarding for success. This can be called a tool with which a child learns to manage finances wisely, save, spend wisely, or save for an expensive toy. The famous personal finance expert named Mary Hunt recommends starting to give your child symbolic amounts starting at the age of seven, gradually increasing the amount. At the age of 10, you can already come with your child to the bank and open a personal account or a debit card, which is linked to the general account. It is the general account that is a good tool for proper financial education.

There is no need to worry that the child will quickly empty his “little pot” with thoughtless purchases, because the parent can set a certain limit for such accounts. The child will be able to use only the allocated amount of money that the parents designate for the month. Access levels are configured differently; it is advisable to turn off SMS notifications to the child’s phone about adult spending; he has no need to know about it at all. Parents, in turn, will see payments made from their child’s card.

The joint account is a good reason to discuss planned family expenses, which he can observe if he wishes. Explain to your child what and where you have to pay, and that you, in turn, expect your teenager to spend only wisely, without making unnecessary purchases. The child will be much calmer if he is aware of what the family can afford and what purchase should be postponed until better times.

3

A gentle show of caring

One day the moment comes when parents become dependent on their children. This situation often happens quite suddenly, for example, when one of the parents becomes very ill. But usually, difficulties develop gradually, as the older generation reaches advanced age and loses health and strength for normal earnings. In both cases, children must take on the responsibility of not only physical, but also financial assistance. This change in life roles is not always easy. Most parents in old age do not want to feel inferior and burden their children, who in turn are not always comfortable giving money or leaving it at home secretly.

Opening a family account will help solve the problem. Not only parents, but also brothers and sisters can easily connect to such an account. No one from the younger generation will have to run to ATMs anymore to transfer the required portion of the funds to their parents. Each child will replenish the account to the extent possible. Of course, such electronic money cannot replace other care and personal meetings, but they instantly transfer the financial issue to the business level. The child understands the parent’s personal boundaries, but at the same time provides him with good financial support. Father and mother will feel like part of a large and friendly family and will certainly feel proud of raising their children.

4

Trust and control

It is not always possible to save a large amount of money for a major joint event in the form of a graduation or corporate party. It is not so easy to find the required amount right away; moreover, many services are provided only after pre-order. A family account will help solve this problem; all transactions become completely transparent. For example, the father of a family may be on the road, go on business trips, but at the same time always be aware of financial events. A shared account not only helps manage large-scale events, but also brings friends together.

5

Ability to manage money

Not many people know how much negativity and fear is associated with money, which often prevent a person from living freely, building a family or career. Among the most common, everyone has probably heard “I can’t afford it,” “I can’t afford it,” “Money ruins relationships,” and so on. Only a psychotherapist can help you work through such fears, eliminate emotional trauma, and solve other problems. At the same time, many will be able to change their financial habits and abandon their usual lifestyle. The assistant and main financial instrument in this case will be a common bank account.

Together with your partner, you can conduct a competent analysis of expenses at the end of the month, understanding which of them were unnecessary and which will require large investments in the future. An excellent option would be to automatically write off funds for utility bills, kindergarten, internet, etc. It is worth learning how to make transfers from your account to your loved ones for gifts and to children for their pocket expenses, so a person feels more generous and gets real pleasure from life.

Investing Personal Finance

The implementation of a financial plan implies constant accumulation of funds. Your savings should not lie dead weight, because in conditions of financial instability, savings depreciate naturally - due to inflation.

It is better to divide large sums of money into parts and invest in different financial instruments. The simplest and most reliable way is to divide available funds into three equal shares and distribute them as follows:

• Investment in US dollars.
• Investment in Euro.
• Savings account in a bank.

Currency investments can also be arranged in the form of a bank account, to which interest will be accrued. This way you will save money from inflation and be able to implement your financial plan on time.

Riskier investments of free money are the following instruments:

• Stock market.
• Mutual investment funds (UIFs).
• Game on the Forex exchange.

By buying shares of the largest players in the energy sector (“blue chips”), you can ensure an annual return of -10% to +20%. Mutual funds will allow you to earn more - up to 30% per annum. But the risks are many times higher than investing in blue chips. The Forex currency exchange is generally an unpredictable tool that can only be used by professionals.

The optimal investment of personal finances would be the following scheme:

• 25% – US dollars.
• 25% – Euro.
• 35% – savings account in a bank.
• 15% – blue chips.

Another relatively safe investment method is buying gold. Statistics show that the price of gold has been growing steadily in recent years. There is no point in buying gold bars directly. For this type of investment there is a special tool - an impersonal metal account (UMA).

Compulsory medical insurance is a type of bank account that is backed by gold (or other precious metals). Transactions for the purchase and sale of metals can be carried out through the bank’s personal account. The process of buying gold is similar to purchasing currency on the stock exchange.

The advantages of investing through compulsory medical insurance include the following:

• Gold and silver have low volatility over long periods of time.
• High liquidity is achieved through the rapid crediting or debiting of metal from the account.
• Security of transactions - all transactions are carried out within the banking system.
• There is no need to create a special storage facility for metals.

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Saving the family budget

Many issues regarding family budget management were discussed above. Now it's time to touch on savings.

First of all, you need to decide why you are saving? The best reason is to avoid spontaneous spending. But in some cases, for example, during a crisis, you have to give up what we call unnecessary expenses. They do not affect the quality of life and are not spontaneous, but at the same time they reduce your budget.

There are a huge number of ways to spend less than is usually done. It is worth considering the most popular and simple ones:

1. After conducting a cost analysis, 5 envelopes should be prepared. Only 1 envelope is spent per week, the rest is removed at the end of the month. You can put it away for savings or please yourself with a sudden purchase. This method allows you to be more disciplined and make an easy forecast with your stable income. You can also use other methods, for example, 50-30-20, as long as you are disciplined.
2. After receiving your salary, the money should be divided into envelopes that will correspond to the main expenses - transport, mortgage, loans, utility bills, food, etc. The remaining amount can be spent according to your preferences.
3. This method will help you achieve your goal. If you want to buy an expensive item, you should divide its cost by 12 months and save a certain amount of money every month. The remaining funds should go to the family budget.

Going to the store
Remember, in this case you should consider saving not for the sake of saving itself, but as a way to refuse unnecessary (namely unnecessary) spending. In this case, your quality of life will not decrease, but there will be funds for investing and achieving financial independence.

And finally, some tips. To save money better, meals should be distributed over the week and you should visit the store only when necessary. An extra trip to the supermarket will certainly end in unexpected expenses. You can also save on medicines, because why spend money on expensive cold medicines if there is a cheaper analogue at a lower cost. You can buy clothes at sales, at the end of the season, because there are basic things that will remain in fashion for a long time. It is important to eliminate bad habits, because it is enough to calculate how much money is spent on cigarettes and alcohol per month.

Choose to manage your family budget according to your taste, don’t be lazy to negotiate with each other, and effectively manage your family budget to achieve financial success.

Author: Dmitry

Poll: How much per month can you save?

Budget savings begin with cost analysis. First you need to find the most expensive directions. For example, the largest expenses are observed in the “Food” section. It is necessary to analyze the structure of this section (costs per month):

• Lunch at work – 7,000 rubles.
• Restaurants and bars – 12,000 rubles.
• Food products – 11,000 rubles.
• Sweets – 5,000 rub.
• Total per month: 35,000 rub.

How to reduce your lunch costs? You can take food with you. In this case, it is easy to cut costs twice. For example, the maximum cost of a home-made lunch (soup or porridge with meat + bread and sweets) is approximately 150 rubles. We multiply this amount by 22 working days and get 3300 instead of 7000 for lunches in a cafe. Homemade food not only saves a significant amount of personal finances, but also has a positive effect on health.