Personal & family budget management
Exercises on how to draw up a budget if you live alone or together. We keep in mind that properly filling in a budget takes time and preparation. Before students start, they write down all there income and expenses for a month. They collect at least the following information:
The income per month. Common are: wages or unemployment benefits, child benefit, holiday pay, year-end bonus, interest on savings, dividends from investments, the rental income of an apartment that you rent out. We explain what kind expenses people have. They include small, daily expenses as well as large monthly or annual expenses. Some examples: the house rent, the payment of a home loan, your mobile phone bill, car insurance. Also try to make an overview of how much you spend on average in the supermarket, on clothing, fuel and school bills. We also include there savings in the budget. With this they will include finance exceptional expenses, such as the purchase of a new car.
Drawing up a budget if you live together Living together goes hand in hand with consuming together and thus spending money together. It is therefore best to make clear agreements about this. Start by drawing up a budget that is as complete as possible. This way you can find out how much money you need each month for common costs (insurance, shopping, rent or loan ...).
There are three ways to finance the common expenses.
1. The combination of a joint account and separate accounts This is the most popular formula today. Each partner keeps his own account in which he receives his wages and any other income. That account is then also used for individual expenses. In addition, the couple opens a joint account into which each month deposits money. That account is then used for common expenses, such as house rent, the repayment of a mortgage loan, groceries, hobbies, holidays, recurring bills and taxes. The amount each partner deposits into the joint account can also depend on each person's income. Either each partner deposits the same amount each month, or each contributes a percentage of his income. Note: the more bank accounts you have, the more bank charges you pay.
2. Only a joint account Some couples no longer have separate accounts of their own. They have all income deposited into one joint account, from where all expenses are also paid. This concerns both common expenses, such as repayment of the loan, rent, insurance and the consumption of natural gas and electricity, as well as individual expenses of both partners, such as clothing, lunch and your own car. This formula was popular when only one partner was working and supporting the entire family. Nowadays they often both work out, which makes the formula of one joint account less interesting. Remember: Living together goes hand in hand with consuming together and spending money together. Talk about it
3. Each his own account It can also be a choice to keep everything separate without a common account. The common costs are then divided among themselves. Each partner retains its financial autonomy. All expenses are then best monitored closely, so that both partners can pay expenses alternately. At the end of the month, they make their bill together and can correct any imbalances. The ideal solution is different for every couple. Everything depends on your own view. Is it fair to have your partner pay half of the holiday budget if you have a higher income? Is it logical that Mrs. only pays for the loan of the car with which she transports the children? Can the rent that the gentleman receives for an apartment he inherited be included in the family budget? Talk about it, so that everyone feels good about the agreements made. Because if one partner feels a little shorted up, that is a breeding ground for problems later.
Don't let money be a taboo!
Once you’ve read the text on the topic, it’s time to test your knowledge.
Solve the following practice exercises!