Personal finances are all the money a person or family has. It is made up of wages, interest on deposits, benefits and other income. Personal finances are affected by different factors: income, expenses, inflation and taxes. To manage your personal finances, you need to plan a budget, control your expenses, and keep track of your income.
Deputy Chairman of the Board of SDM-Bank for Customer Service Vyacheslav Yurievich Andryushkin told RuNews24.ru in an interview. Also, the interlocutor of the publication pointed out a few simple lifehacks for managing the family budget.
“Personal finances - this is not the accounting of the enterprise, and to plan them is quite simple. What's important is budgeting and identifying protected spending items, that is, those that cannot be waived. For example, school fees, children's school fees, rent - these are all mandatory expenses that cannot be waived. If you drive a car, you need to consider gasoline and other expenses.
You also need to not forget about debts - for example, loans that need to be paid off. Include monthly payments in your budget if you have debt. The sooner you can pay off your debt, the more money you will have for savings and investments.
You also need to determine how much your family spends on food and other variable expenses. These items are floating because you can save money on them or, conversely, increase spending if your total income allows. It is better to start from real indicators that have been observed before. Historical data of personal budget allows you to clearly understand how much the family spends for a certain unit of time - for example, for a month,” the expert recommends.
Next, the speaker advises you to compare your expenses with your planned income, which is broken down by the period in which you receive it. It is best to enter this into a so-called “cash flow” - a timeline - using specialized personal finance planning software. This helps avoid liquidity gaps or cash flow gaps when income has not yet been received and expenses already need to be incurred.
“If there is a minus in the family budget, it is necessary to either postpone the costs to later periods or provide for the possibility of financing through a bank or a special-purpose loan. It is important to take care of all this in advance.
Also, you can use a simple know-how: involve all members of the family in budget management. For example, ask them to calculate the costs of certain activities and see if the family budget allows you to do so. Is not too expensive to eat out this week, how you can optimize these costs and so on, “- says Vyacheslav Yurievich.
The expert is confident that by working together you can discover what you spend too much on in certain categories. Then you can decide with the whole family whether you want to change priorities and reduce certain expenses.
“If income exceeds expenses (and it should), some money should be set aside in a stabilization fund - a “rainy day” fund. This fund will help cover unforeseen expenses, for example, if someone falls ill or there are car problems that need to be solved quickly. In other words, you need a liquidity cushion - a cash cushion that will allow you to solve such problems. Usually we are talking about allocation of about 10% of income for the formation of such a “fund”, - gives advice to the representative of SDM-bank.
At the end of the conversation Vyacheslav Yurievich advised to designate your financial goals.
“Perhaps you want to save for a new car, for retirement or for children's education. Financial goals will help you strengthen your motivation and stick to your budget,” he concluded.