5 tips to manage family finances

Management of household finances is something important to do. With a good management, our future financial goals can be achieved. In general, everyone wants to own a home, get rich, and can enjoy a comfortable retirement. All of these costs money. Money is not everything, but everything needs money. If you can manage the household finances properly, then surely your purpose will be achieved. In this article, I will give tips on managing the family finances.

1. Determine the goals you want to accomplish. With a common goal to be achieved, you will be easier to get there. Without clear goals you will sometimes be tempted to use your money. Write down your long term goals and stick on the wall of your room so that you will keep seeing the purpose.

2. After determining the goals that you want, it's time you define a strategy. You can invest in fixed-income funds that have a lower risk. With the assumption of returns 12% a year then by saving 500 hundred dollars a month you can buy such a big asset or property, or fulfill any of your financial goal.

3. In planning your family finances, you need to know your financial situation, and fix it if things go wrong. Calculate your expenses and income in advance. Here are the rules you should follow:
- Income must be greater than the expenditure

- Total mortgage debt should not exceed 30% of your income. If your salary is 1000 dollar per month, your debts must be below 300 dollar per month.

- Reserving at least 20% of income for investment. If you cannot save money currently, there are two things to do. First to raise revenue, for example by trying a side business as an insurance agent, selling MLM products, or doing business via the internet (internet marketing). The second is to lower your expenses. You can use your credit card when shopping. When the credit card statement came out, you can see where the money came out and tried to reduce these expenses. In this way, your expenses can be reduced. Avoid buying goods that are not important.

- Set aside 5% to buy life insurance for breadwinners. Insurance on children is unnecessary. If a breadwinner dies, then the family will be left in financial difficulty because there is no income from a breadwinner. But if the child dies, the family will have no trouble financially.

- Prepare an emergency fund of six months the amount of spending per month. If you are spending 800 dollars a month, then spend 4800 dollars as an emergency fund. Benchmark of six months can be adjusted with your condition, such as your occupation risk, job prospects and health of family members.

4. The use of credit cards should be properly supervised because there are many people who have problems with credit card debt. Tips in using a credit card:
- Immediately pay off your credit card and do not be late to pay credit card bills.

- Avoid withdrawal, because it has a big interest of about 4% per month.

- If you have credit card debt in several banks, pay a minimum payment in advance of all credit cards. If there is still money left, use it to pay off bills with the biggest interest. Do this until your debts discharged.

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