“Financial freedom is available to those who learn about it and work for it”. – Robert Kiyosaki

 

One of the greatest wishes for everyone is to build a harmonious family and have a comfortable life with them. To have both of those things, you need to work on them. One way to do it is by predicting the financial condition of your family in the future.

Having the ability to predict family finances in the future can help you budget for family finances. To do this, there have been many tips shared by financial experts to help you. The author has summarized four things you can do to predict the financial condition of your family.

  1. Monitoring family income and expenses

If you are not tracking family expenses, it is easy to lose track of where all your money is going. If you want to predict the financial situation of your family, you must first start monitoring where your income is going.

You can do this by drawing a simple spreadsheet on the computer or you can make a book of your expenses and record it every day. To get started with this monitoring, you can start trying it by entering the sections below:

  • Date – the day something is paid for
  • Amount – how much money was paid
  • Item – what you buy
  • Method – how you pay (by card or cash)
  • Reason – was the purchase a necessity or a luxury?
  • Additional notes – comments (maybe if this was a casual purchase or not)

You can record things like weekly grocery shopping (multiple items) as one item name only, such as groceries. By keeping track of expenses, it is easier for you to know what is coming out of your account each day of the month.

  1. Making a Family Financial Plan

Make a financial plan for your family and try to follow and stick to it. This financial plan is an important step in protecting the future of the family and predicting what is good for the condition of your family.

No matter how difficult it is for you to follow this plan, you must start trying to achieve a stable financial condition in the future. You can predict your financial condition well when your financial plan also works well over time.

  1. Distinguishing Priority Scale

To make predictable financial conditions well, you need to distinguish which are the most important expenses to the ones that are not the main ones.

The main expense is a payment that is relatively consistent and from month to month and is a necessity for your family. The more budget that goes into your main expenses, the less flexibility you must adjust or change your financial condition.

Examples of major expenses:

  • Home installments
  • Transportation installments
  • Health Insurance
  • Electricity and Water Bills
  • Consumption Costs

On the other hand, there are expenses that do not have priority. Usually, this is fulfilled just for a person’s lifestyle, or shopping habits. These expenses are classified as “wants/ desires”. Therefore, expenses that belong to this category can be adjusted easily and you may be able to eliminate your expenses that fall on this scale.

Examples of non-priority expenses:

  • Unpredictable shopping
  • Eat outside
  • Gift
  • Entertainment
  • Buy clothes

With this priority scale, you will learn to determine which things need the most money and which can be eliminated.

  1. Planning for Savings or Investments

To predict your family’s finances in the future well, you also must start to save or invest. There are various suggestions that you can follow to save. The most possible and easy thing that you can start with the first time you save is to set aside a minimum of 10% of your income to save or invest.

To make you aware of the importance of saving or investing, you can immediately determine the purpose of saving. For example, you are saving for a child’s education fund. Or you are saving to raise a family emergency fund.

May 10, 2021

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