Family budget: find out how to create one to avoid debt

Financial expert Paco Fazito teaches you step-by-step how to prepare an expense report. Planning your family’s finances is essential to avoid unexpected debts and ensure a more peaceful financial life. One of the secrets to achieving short- and long-term financial goals is creating and maintaining an organized family budget. In the end, […]

Financial expert Paco Fazito teaches you step-by-step how to prepare an expense report

Planning your family’s finances is essential to avoid unexpected debts and ensure a calmer financial life. One of the secrets to achieving short- and long-term financial goals is creating and maintaining an organized family budget. After all, a lack of financial control is a leading cause of debt, stress and confusion in families.

By the way, compiling this much-hyped income and expense report is not that simple. But there are processes and rules that, if followed, can change the lives of families. “Collaboration and financial transparency strengthen family ties and create better stability for everyone. The importance of expense planning must be understood by everyone. This increases the chances of success,” explains financial expert Paco Fazito, who illustrates the stone path to prepare the report. “Without proper planning, it is often difficult to identify where the money goes, which can lead to the accumulation of debt and the compromising of important dreams.”

Increase all sources of income

The first step is to identify all sources of income for the family. This includes salaries, investment income, pensions, or any other amounts received on a regular basis. “Knowing exactly how much will come in is essential for efficient planning,” says Fazito, CEO of the financial hub Odonto Pay.

List all expenses

Next, it’s time to organize your expenses. Separate fixed costs, such as rent, electricity and water bills, from variable costs, such as food and leisure. Fazito recommends itemizing all financial outflows, even small ones, to have a clear view of where the money is being spent.

Sort expenses by priority

After listing your expenses, rank them by degree of importance. “You need to give priority to essential expenses, such as food and accommodation. Then you can list the costs related to healthcare, education and transportation,” explains Fazito. This process helps identify possible excesses in secondary expenditure.

Set financial goals

Setting clear goals is one of the pillars of a successful family budget. It could be a family trip, paying off debt, or building an emergency fund: “With defined goals it becomes easier to direct resources and stay focused,” she says.

Use financial control tools

To facilitate management, rely on digital tools, such as financial control applications or electronic spreadsheets. They help monitor inputs and outputs and provide reports that help in decision making.

• Cell phones

  Ideal for detailed control, with interactive graphs and customized reports.

• Guiabolso

  Great for those who want convenience, as it automatically syncs with bank accounts.

  YNAB (You need a budget)

  Perfect for those looking for an efficient and disciplined budgeting method (in English).

• Wallet

  Great option for account synchronization and long-term financial planning.

Source: Terra

Ben

Ben Stock is a lifestyle journalist and author at Gossipify. He writes about topics such as health, wellness, travel, food and home decor. He provides practical advice and inspiration to improve well-being, keeps readers up to date with latest lifestyle news and trends, known for his engaging writing style, in-depth analysis and unique perspectives.