The conclusion drawn by Amaya Guerrero, author of ‘Clear accounts at home’ (Current Platform), of the questions he is asked on a day-to-day basis is that, in general, «no one has a budget. The strange thing is to have it, but I am not very surprised either because we have not received financial education, nobody has explained to us how to do it. But the reality is that each house should make one. We can control spending, which is the autopsy of an economy, while the budget “presupposes” where each euro that enters the house is going to go. It is a detailed detailed picture of family income and expenses.
If I don’t have a budget, I won’t know the reality of my economic situation
», he warns.
Being clear that a family budget is a plan of what you are going to do with the economy of the house, how to do it? where to start?
The same as with expense control: you can use an excel, a mobile app, envelopes or any paper, which is free. The important thing is to do it, you can’t get lost in analysis paralysis.
From there, what do we have to do?df
Collect income on one side and expenses on the other.
In the income part, we must write down any income that we can receive, be it payroll, an extra bonus, or money from an income for renting a house, for a storage room… Any income we have.
In the expense part we can make different classifications: we can divide between fixed and variable expenses that we must know. For example: in the landlines we have to write down what we pay for housing, our children’s extracurriculars… That is, the amounts that we know will come each month. You can’t think: «what a surprise, the mortgage or basketball has come to me!» because those are fixed expenses that are going to come to us every month.
What are variable expenses? Those that we do not know exactly the amount but that we are aware that they will also be produced. I am referring to food and supplies ((telephone, electricity, water)… With these expenses we can estimate the amount that will come to us every month and on that we must always round up, to always try to not cheat to the lonely
Is there a way to cut back on those fixed but not so fixed expenses? what can help you?
Yes. You can look at all of your food spending last year and divide it by 12, just like you can with supplies.
You can also keep important dates in mind. For example, we know that in December we are going to spend more on food, in August more on leisure and in September on books, materials and school uniforms. As long as we have our budget, we can adapt it to us. We can contemplate that those months the expense will be slightly higher, because the budget is something alive and modifiable to know that there will be no surprises. Really, what allows you to have a family budget is to be the boss of your own economy and to anticipate, not to be left in dry dock due to unforeseen events. An unforeseen event is that your new car breaks down, but if the vehicle is thirty years old, it is most likely to break down.
In general, are we clear about which budget expenses are necessary and which are essential?
It is good that we do this exercise ourselves. The expendables are those of leisure that we can do without: that subscription to a gym that you don’t go to, a magazine that you don’t read, or one of the many TV platforms that you don’t use later. The necessary ones are the impenetrable ones: the mortgage, the training of your children or your own, the clothes… In short, the things that we cannot eliminate.
In this family budget, should both members of the couple be involved?
Each couple can have their own account, and then a common one. We are talking about three economies: your husband’s economy, yours and the joint family, to which each one contributes to the family economy but allows each one to keep money for their things.
There is no perfect formula, you have to find what is perfect for you. There are families that work well this way and there are families that prefer to have all their eggs in the same basket. The reality is that today technology allows you to have a little more independence. The fact of working like this, with a common part, can also be done in different ways: Contributing a fixed amount or a percentage of each one’s income. There are cases in which one member cannot contribute the same as the other.
Is it possible to adjust food expenses?
I recommend drawing up a weekly menu where you write down what is going to be eaten in that house next week. Depending on that menu, the shopping list should come out. Ideally, on Friday you prepare that meal plan, on Saturday you buy and on Sunday you cook. Or the other way around, “I look at my pantry, I see what foods I have closest to expiring and I buy ingredients that are missing”.
Also, I recommend going to the supermarket only once and always with a list made. Why if we go many times, we buy things we don’t need. You come because you are missing the tomato jar and you come with a whole cart of things you don’t need. Or you are going to make the food and since you don’t have the ingredients, you put the frozen pizza from the fridge in the oven, and all that generates expenses. I understand that having children, working, sometimes that can happen to you… But the idea, what you are trying to achieve with all this, is to have a savings plan, which in the end is what we are trying to achieve.