You cannot completely give up entertainment, not set long-term goals, and not save.
Making large purchases not from savings but on credit.
Lada and Maxim take their daughter to the sea every summer. To do this, they take a loan or borrow from friends. The remaining 11.5 months are just enough for them to pay off their debts and buy the next tour on credit. Permanent loans deprive the family of the opportunity to develop financially because of both current and future income pay for the vacation.
What to do
Set aside 10–20% of family income monthly for large purchases. For example, if you start postponing for the next one right after returning from vacation, then you can save up for a decent tour in a year. And you will not have to overpay interest on loans.
Read also: How to Save Money with a Low Salary
Thinking You Don't Need a Contingency Fund.
Oleg and Sveta make good money. They go on vacation twice a year, prepare their son for college, and keep a purebred dog. Last month, a misfortune happened in the family: one of the grandmothers fell ill. Sveta had to take a vacation at her own expense to take care of the patient. As a result, the family budget has almost halved, and expenses have increased dramatically.
What to do
Create a reserve fund in advance and put at least 10% of income every month in a separate account. Financial advisors recommend having a safety cushion equal to the family's expenses for 3-6 months. Take, for instance, monthly expenses of 50,000 rubles, then the reserve fund must be at least 150 thousand.
Withdraw money from this account only in case of large unforeseen expenses and replenish the spent as soon as possible.
Planning expenses for less than a year
Olya and Misha have been conscientiously running the budget for four months. They record income and expenses, try not to make rash purchases. It was time to get my son to school in August, and then, as luck would have it, the car insurance ended. Olya had to skip a month of classes at the art studio to not get into debt.
What to do
- Analyze the budget for the last 3-4 months. Answer the questions:
- Which expenditure items are overblown? Why?
- Are there any "lost" amounts?
- What can you save painlessly?
- Is it possible to reallocate expenses to start saving?
- If expenses exceed income, why did this happen?
- Calculate all required expenses for the year ahead and set aside 1/12 of the resulting amount monthly.
- Plan monthly and annual payments: rental housing, insurance, taxes, loans.
Not using property that can generate income.
The family of Slava and Katya has two cars, and the driver's license is one. Slava drives one car, and the second is gathering dust in a removable garage. The family spends money on rent every month, and the car loses value every year.
What to do
Sell unnecessary vehicles, get rid of garage rent, and save the money, invest, or spend on education.
Also read: How to Save Money Fast as a Student
Do the same with other property that is not in use: sell old bicycles and strollers, rent out empty apartments and summer cottages. To do this, take a photo and place an ad on one of the services:
- Airbnb - rent out a property;
- Rent A Ride - rent a car.
Refuse from electronic assistants
Ludmila has been managing the family budget for five years. To do this, she collects receipts for all purchases and writes down other expenses on multi-colored stickers, which she then sticks somewhere visible.
At the end of the week, she writes down all expenses in different colors on her own table. And everything would be fine if the receipts were not lost, the children didn’t take the colored pens away, and the notebook didn’t disappear at the wrong moment.
What to do
Install an application for home bookkeeping on a smartphone or computer.
Adapted and translated by The Cop Cart Staff
Sources: Life hacker
