Managing your personal finances is no different than a business, managing finances. It's all on fixed and variable costs.
Family and personal finances much like a business finances. Both are based on manage fixed and variable costs. Fixed costs for your family would be the mortgage, car payments, insurance, heating, gas for the car, grocery, water and electricity bills. Variable costs may include eating out, movies, general entertainment, gym memberships, new clothes, or simply that you buy coffee in the morning. They are not fully capable of doing, away with fixed costs. You still need to pay a certain amount for this, but you can influence these costs and change the amount you spend. For example, if your family only need a car, but you have two, then eliminate a car payment is a huge monthly savings.
You can also add some habits, such as buying in bulk and spending less on food. Simple things like turn off the light, quick showers instead of baths, and the water does not even help. All these little things can make a difference. However, the variable costs are those costs which, if you can affect your behavior the most. Do not buy that £ 1.00 morning coffee might seem like nothing, but every day you decide not to buy, is that coffee £ 7.00 saving week, £ 30.00 per month and over £ 360.00 per year.
How often do you eat for lunch or dinner? How much is that you and your family? The point here is not to say you should never buy anything. Rather, the goal is to be aware of what you spend your money, find areas to cut back on, and save money. It's not as difficult as you might think. It simply starts with the understanding that you have both fixed and variable costs, and that you affect both.
Take the time to write your own list of fixed and variable costs and their corresponding quantities. After you have created your list, create a plan to reduce some of these costs. How do you to start again, make sure that you apply the 70/30 ratio to your debt and savings. 70% of what you should pay back in the direction to make your debt, and the remaining 30% should be included with your "pay yourself first" plan.
o Fixed costs: mortgage and car payments, heating, gas, water, electricity and food bills. o Variable costs: eating out at lunch and dinner, entertainment, going out with friends, movies, coffee in the morning. o Set up your own list of fixed and variable costs: Take time to write your own monthly costs. This is a better perspective on where your money is going. o Use the 70/30 rule: Take the amount you are able to get back on and apply 70% to pay off your debt, and plan for the remaining 30% on your "pay yourself first".
While this may seem like a lot to do everything, it really is as simple as intelligent decisions. It is simply a matter of deciding on your priorities. The intent is not to lock up your home and enjoy never go out and have fun. However, you need some concessions, how much you spend, how to make a family. It is not easy, but it is necessary....
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