Personal and family finances can be managed in the same way that a large company would. At the end of the day, the rule for all of them is always summarized in the same thing: that the expenses do not exceed the income since, otherwise, we could end up in a bankruptcy situation.
However, it must be borne in mind that in many cases this is not possible or is not as simple as it might seem at first glance. Let us bear in mind that companies have specific financial departments that are in charge of carrying out this work and it is most likely that none of us have the appropriate knowledge to bring our economy to fruition. But don’t worry, there are simple rules so that the management of our finances is healthy and does not become a real nightmare. Do you want to know what they are?
We know how difficult this statement is. Saving 10% of our monthly net salary is not available to many and increasing this income is even more difficult. For this reason, the remaining 90% must be managed in such a way that allows us to arrive with a certain relief at the end of the month.
To do this, the most advisable thing is to divide each item of expenditure according to its quantitative importance and according to whether we can do without it or not. For example, paying debts is a priority and spending on food is necessary; However, we will be able to do without, at any given moment, using the vehicle and have considerable savings in gasoline.
The mortgage is the most important expense that all families have to undertake throughout their life and, without a doubt, the most expensive. Experts agree that this expense should not exceed, in any case, 30% of our monthly income. In any case, to comfortably make ends meet, it is convenient to limit it to 20-25%. That is, for a family whose income is 2,000 euros net per month, the mortgage payment should not exceed 600 euros per month for a term of at most 30 years.
But it is also necessary to take into account the value of the home. In this sense, no family should use their gross income of more than four years to buy a home. In other words, if a family has a gross annual income of 40,000 euros, they should have access to a home whose appraisal value is, at most, 160,000 euros. To perform the calculations, it is advisable to use a mortgage simulator that helps us to know the percentage of mortgage and salary that each situation would entail.
In general, the total of the monthly installments destined to the payment of the debts should never exceed 40% of the monthly net income. This means that, if we are already allocating 30% to the mortgage payment, we can allocate 10% to satisfy the installments of the rest of the outstanding debts, such as: personal loans, the car loan, the purchases that have been made installments and the fee to pay from credit cards.
If we find ourselves in the situation where we cannot assume such a high fee, if possible, we should defer purchases until we have reduced other outstanding debts or until we have more income. In the case of the previous family, with a net income of 2,000 euros per month, you can allocate at most 800 to pay all debts.
After having faced the payment of financial expenses, which have absolute priority over any other disbursement, it is time to assume the expenses on other basic needs such as eating, dressing and paying the bills for electricity, gas, water, telephone or Internet.
If we dedicate 40% of our expenses to satisfy our basic needs, we will still have 10% left for whims. That is, for a net income of 2,000 euros per month, 800 may be used to pay the first and about 200 for the second.
If we follow these tips to the letter month by month, we will find a saving at the end of the year of about 2,400 euros, which is not bad at all.
It is, therefore, a very useful form of monthly savings and planning of personal finances and, although in our daily life things are not so simple, it is possible that these guidelines can be a good starting point to try to get well. at the end of the month.
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