Financial condition of a family is not dependent on the number of earning members but, many people consider it so. It actually depends on the number of spending members. Though there are three earning members and four spending members the expenditure goes up to sky when there is no control on spending. On contrary a family having one earning member and four spending members can happily survive. This is because of the smartness of members in the family.
One should know the tips of managing investments and finances otherwise inflow of money gets wasted at each step. This attitude may end up in multiple loans and repayment burdens. Following are the few tips to mange finances for better financial condition of a family. First thing is to have restriction on spending. There should be an account book for recording each and every penny spent on daily basis. This should be calculated at the end of the month so as to know the monthly expenditure. If the expenses are going beyond budget then it should be barred to get the expenses within the budget. If the expenses are less than the budgeted amount then it should be considered as savings.
A separate account should be maintained for the requirements of all family members. Purchase limit should be specified for every purchase need to be done. There should not be any hesitation in the family to discuss about family finances so that the information flow should be clear. Investments should be scattered in different portfolio. Capital investments, mutual funds, land property and fixed deposits are few of the investments that one should look for.
Investing entire savings on one type of asset is not a smart idea. Annual financial planning should be done for investing on tax free bonds or else most of the earnings attract huge tax. Some of the tax saving schemes is like infrastructure bonds and post office bonds. These tips are definitely proven and can help many middle class and upper middle class families. This is the way for reaping more happiness from fewer efforts.
How Finance And Loan Are Related
Financial condition of a home also depends on the total loan burden of a family. If amount of easy monthly installments are more then most of the earnings gets lost in paying loan EMIs. Hence, loan amount should be within the capacity of repayment. Extending it for greed is neither safe nor compatible for happy life.