The correct financial organization can help you not to fall into perrengues when adverse situations arise. Crises are common, but those who are better prepared face them easily.
Do you have a large family and want to organize your monthly money?
How to Split the Family Budget?
But after all, how can we divide the salary of two or three family members for monthly expenses? How much for leisure? How much is in essential expenses?
We specify below. Read:
emergency reserve
The emergency reserve is the first step that deserves your attention before learning how to divide the family budget, after all, its name says everything about its importance.
We are never prepared for an unnecessary surprise or emergency, at least not 100%. However, we can prevent ourselves for possible situations.
But how to do it? Building an emergency reserve, thus becoming more prepared for adverse situations.
After all, when we talk about family budget , we are mentioning more than one person, and we certainly love them all to the point of not wanting them to be in need.
The emergency reserve must correspond to:
- 6 months the value of a salary earner or his monthly living expenses;
- 12 months of self-employment billing or your monthly living expenses.
If you stop to do the math, the employee still has unemployment insurance, which can reach 6 months of aid also completes 1 year with the amount saved.
So, calculate how much your cost of living is worth and multiply as mentioned, separate this amount and create your emergency reserve as soon as possible!
essential expenses
How to split the family budget? Start with essential expenses, after all, as the name implies, they are expenses that need to be done every month.
Add the salary of the family members, whether a couple or with the additional salary of a child who works and lives in the house.
Thus, at least 50% of the total must be allocated to essential costs, such as water, electricity, internet and food. Some people increase this percentage to 60%.
But other people reduce these expenses to 40%, trying to save on electricity and rent, allocating the other 10% or 20% to investments.
investments
Investments are as essential as any other expenditure, as well as leisure. After all, they guarantee a better future for us and our children.
They are separated into two sectors: short-term and long-term. The first has to do with acquisitions such as changing a car, a cell phone or a new computer.
The second consists of long-term investments, such as your financial freedom, money to pay for your children’s college or buy your dream home.
The amount withdrawn for investments can and should vary between 20% and 30%, but some people who care more about the future even put 40% of the entire value in investments.
Leisure
Leisure, on the other hand, is the most expendable of all, but it needs to be on the list, after all, no one is made of iron and deserves to go out to enjoy a movie every now and then, order a pizza or sushi.
Set aside something around 10% to 15% of your monthly income for your family’s leisure to be full and sufficient.
Family Budget Division Methods
How to split the family budget? Below we leave some exclusive methods that we took from our publication on monthly expense control worksheet. Check out:
Method 60-10-10-20
Based on 4 ways to separate your money. Are they:
- Essential expenses (electricity, water and rent): 60% of your income;
- Short-term goals (buying your dream wardrobe or computer): 10%;
- Long-term objectives (investments in fixed or variable income, etc.): 10%.
- Leisure expenses (pizza, cheese, cinema or even Netflix): 20%.
50-30-20 method
In the 50-30-20 method, things change.
The money spent in an essential way is reduced and gives way to leisure and investments.
Look:
- Essential expenses: 50% of your income;
- Leisure expenses: 30%;
- Short and long term goals (investments): 20%.
This worksheet is suitable for younger people who have a lower number of essential expenses.
Method 50-15-35
This worksheet is suitable for young people who want a good amount of money in the future, or adults who are looking to invest heavily in their retirement.
It is characterized by 50% on essential spending and 15% on leisure, with travel, cinema and pizza, for example.
Here’s what the remaining 35% look like:
- Essential expenses: 50% of your income;
- Leisure expenses: 15%;
What did you think of our tips on how to split the family budget? Are you going to start looking for a more sophisticated financial organization? Follow our tips and you will be successful!
