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How to Handle Finance if you have Dependents

How to Handle Finance if you have Dependents

How to Handle Finance if you have Dependents

  

Though having a big family has its own benefits, managing parents and your children can make your expenses go out of hands. However, by following some simple tips and rules, you can make sure that your finances are in control while making everyone happy.

Create a budget

The first step if you think you have crunched finances is to create a budget. This depends on your income, expenses, and your lifestyle; however, the steps to do so remain the same. So here we go…

  • The mode of your budget– First decide how you are going to make your budget. You could create one with a paper and pen but the disadvantage here is that you have to calculate everything manually here. The other better method is doing it on a spreadsheet. Here, you could segregate your income and expenses and also make charts for all categories of your expenses. There are also sophisticated online software, and some free ones too for this. In these software, you can use various charts for keeping a track of your expenses and seeing where most of money is going. There are also some money apps that could be used for this but online software are better as they show you a visual depiction of your charts on the screen.
  • Making an actual budget – Before starting to chalk a budget, you must finalise your financial goals. Without defining your specific goals like your child’s studies, how you can save for it. Consider segregating your financial goals into two categories – short and long-term as per your priority. For example, your main goal could be to change your car before spending on an exotic vacation. Then, you should list all your income sources and expenses and make various categories. Like for expenses, make categories like grocery, utilities, investments, loans, and luxuries. Now, assign a budget for all these categories. This way, you can avoid any impulsive buys and stay inside the boundaries that you have set.
  • Being inside the budget – Though this isn’t easy, after you have created your budget, you must stick to it in all circumstances. Don’t redirect your income to other categories without a need. For instance, don’t skip any investment just because your entertainment expense went overboard for a month. This should be a complete no. Keep cross-checking your bank statement along with your budget to see if all you have noted down all your expenses and not missed anything. Also, minimise the cash transactions and use your debit card more often. This way, you can track what you have spent. It’s wise to have the ‘Savings First’ approach and not spend without thinking twice.


  

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