How to Manage Good Family Finance

Managing family finances is a difficult job. How to manage good family finances? will share tips 14 examples of good family finance management behaviors.

Did You Know, How to Manage Good Family Finance?
Here are 14 examples of how to manage good family finances

  1. Start saving or increasing saved money.
  2. Create a budget and discipline against spending.
  3. Reduce unproductive debt.
  4. Pay full credit card debt every month.
  5. Control or reduce consumptive monthly spending.
  6. Shop with SMART, do not be easily fooled.
  7. Consult a financial planner or an expert if your credit card becomes unmanageable.
  8. Have enough insurance, no more and no less.
  9. Have emergency funds for critical needs.
  10. Consult a financial planner to deal with complicated financial problems.
  11. Create a financial plan to meet future financial goals.
  12. Make a calculation of pension needs early on and start preparing for retirement.
  13. Invest in accordance with financial goals and 3M (mindset, method, money management).
  14. Do not forget to take care of inheritance issues.

Managing Income and Expenditure
Points 1 through 7 describe the habits of managing family finances that can be done immediately. What needs to be done is intention and communication with the whole family. Many people have difficulty managing family finances, not because they can not manage money but most people can not control “desire” or “lust”.

Want to buy this when not yet needed
Want to buy BRAND but have not been able to buy a brand.
Want to WOW and appear EXPENSIVE.
and others.

Managing spending does not mean life is difficult, does not mean living within limitations. Managing spending means organizing and balancing expenses to meet multiple goals, including future goals. In managing finances, there are at least 5 types of expenditures:

  1. Needs
  2. Debts
  3. Desire / Wants
  4. Savings
  5.  Investment

People who have difficulty managing family finances often mis-prioritize their expenses.

Person A

  1. Needs
  2. Investment
  3. Savings
  4. Debt
  5. Desire / Wants

Person B

  1. Desire / Wants
  2. Debts
  3. Needs
  4. Savings
  5. Investment

Figure (a) shows the old or common way people use to manage family finances. Figure (b) shows a wiser way of managing family finances.

What is the difference between how (a) and how (b)? The difference is “PRIORITY” expenditure. Way (b) does not mean that person lives in deficiencies, limitations, can not enjoy life and others. Way (b) is one of your self-respecting forms, which is to divide current expenditures for future needs.

Foundation of Family Finance
Points 8 and 9 are the foundation or foundation of a family finance. Many people (especially married and dependent) tend to underestimate the function of insurance, especially life insurance. Have you met your friends or acquaintances who are married or dependent, preferring car insurance over life insurance? How do you think?

One fact that is unique and often encountered, when you buy insurance, you do not know how much is needed. It could be that you bought too much, too little or wrongly bought the product.

If you currently have an insurance policy and you doubt whether the policy is sufficient or not, then you can consult a financial planner to help calculate your insurance needs.

How to manage good family finances, you can start from the most basic and most important is to manage cash flow (cash flow management). After that just make the next financial plans.

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