ABSTRACT
“It all starts at home”, we think that's the basic idea of this article which may have financial and behavioral patterns such as creating budgets for household expenses, savings, reduce costs and set goals. This culture can also be transmitted to companies as good practices that could be coupled with professional analysis so high risks can be avoided and even bankruptcy.
The main objective of this paper is to examine the flow of money moving into home in order to set targets to reduce household expenditure and from this a range of salary set aside for savings.
It is important to have a financial planning at home and develop a budget to obtain and achieve organization for future projects such as buying a home, car, vacation, getting a pension, education of children and enable economic solvency to a significant reduction of debt. To achieve this, it is important to find a balance between revenues and expenditures plus savings. To achieve this goal you must first set goals that help to get a reduction of the debt using some of the progressive income to pay it and eventually establish a long-term savings that can achieve financial solvency in the future.
This article illustrates with examples and systematic steps how to achieve the desired family financial stability. In its order are:
1) Create a budget: Setting average monthly income by calculating the average monthly expenses (fixed and variable ones) and subtracting the second from the first one to know what the monthly balance is.
2) Set targets to reduce debt: This is the most important step, because if you want to reduce the debt must be clear about how you could accomplish this.
3) Set savings goals: Like the previous step, it is important to know how to go gradually saving money in order to raise resources for investments reaching.
4) Develop a spending plan: The final part of financial planning, which is for regulating and monitoring the flow of money without overdoing it; so this feeds the reduction of debt and maximize savings while minimizing their negative impact on family life daily.
A good way to prevent financial crises is to create and establish personal finance, assigning priorities especially when we have many debts and save, and then think about all this as short, medium and long-term. Not to forget that we must keep the quality of life for our family, couples, personal education, etc. Then it is important to have these habits and transmit them to future generations..
