How to Calculate Monthly Expenses for Family Finances

How to calculate monthly expenses is not only intended for you to know how much your family spends each month. On the other hand, this is also a way for you to make the best use of your income for family happiness.

Everyone would want to have a happy family. And it turns out, those who feel happiness with their family are not those with high incomes but those who are able to manage finances.

This method of calculating monthly expenses is more aimed at how the money can be used as best as possible. There is a portion for needs and also a portion for wants.

For more details, you can learn the following 4 methods of calculating monthly expenses. You can choose which method is right for your condition.


How to Calculate Monthly Expenses for Family Finances

The 4 Simplest Methods for Calculating Monthly Expenses 

There are at least 4 methods or ways to calculate expenses so that family finances are stable.

The 50/20/30 method

It is true that this need must be met. And meeting needs should take precedence over wants. Some say we must be able to distinguish between needs and wants in order to live frugally.

That's right. However, that doesn't mean we can't fulfill our desires. Because fulfilling the desire is what makes a person happy.

For that, a workable spending method is 50/20/30. What does it mean? 50% of income must be used to meet needs. 

Try to have enough money. Meanwhile, 20% of income must be allocated for savings. Then the rest (30%) is used to fulfill desires such as traveling, buying secondary or even tertiary goods, traveling, and so on.

The 80/20 method

The first method sounds quite complicated. You can more freely and easily manage your money with the 80/20 method. You can use 80% of your income to meet any needs, whether it's basic or non-basic needs.

You can adjust the percentage according to your needs. For example, you want to go on vacation to a place that requires a lot of money.

Automatically, you can reduce the cost of basic necessities, such as being more economical in shopping for food. The goal is that more money can be allocated for holidays.

However, there must still be an allocation for savings of 20%. This is money that you can save to use in an emergency. 

Method 40-30-20-10

Have a lot of needs that must be met? You can use this one method. 40% for basic needs, 30% for installment payments, 20% for savings, and 10% for fulfilling desires such as traveling and eating. 

The Kakeibo Method

Still having trouble with percentages? You can try this one method. His name is Kakeibo. There are 4 questions that you must answer when you want to apply this method.

  •      How much money can you make?
  •      How much money do you want to save?
  •      How much money are you willing to spend to make ends meet?
  •      How much money do you want in savings?

Which method of calculating expenses is right for you to apply? Adjust to the amount of monthly income and the needs that you have to fulfill. 

That's what you should take into consideration when choosing.

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