This time, I’ll share three key points to check when managing your household budget.
Three Key Points for Household Management:
- Confirming Income and Expenses
- Tracking Spending Paths
- Reviewing Assets and Liabilities
The first point, “Confirming Income and Expenses,” involves understanding your income and where your money is going. While you can see the money coming in by checking your bank account statements, you won’t know what the money is being spent on unless you record it. That’s why keeping a household budget is necessary.
The second checkpoint, “Tracking Spending Paths,” refers to keeping track of credit card payments and similar expenditures. If you use cashless payment methods like PayPay, make sure to include those in your household budget as well.
As for the third checkpoint, “Reviewing Assets,” it’s surprising how many people don’t have a clear understanding of their assets. Once you start serious asset building, the number of assets you need to manage increases, so it’s essential to grasp your current situation.
Additionally, it’s important to check any liabilities, such as car loans, mortgages, or credit card loans. Depending on the remaining balance and interest rates, it might be more efficient to prioritize repayment over asset building. If possible, consider early repayment.
By the way, here are the top three expenses you can cut:
- Life Insurance
- Mobile Phone Bills
- Time Deposits
Life insurance premiums should ideally be kept around $30 per month, and even with death insurance, try to keep it under $50. For mobile phones, consider using a low-cost SIM card.
While time deposits aren’t an expense, there are far more efficient ways to manage your money. You should set aside 3 to 6 months’ worth of expenses as emergency funds, and invest the rest.
Managing your household budget might be challenging at first, but it’s worth the effort.
The key to maintaining this practice is to keep your financial flow as simple as possible. Having multiple bank accounts or credit cards can make the process more complicated and reduce your motivation to continue.
Once monthly household management becomes easier, you’ll be able to maintain your asset-building efforts, and your assets will naturally grow. Give it a try!