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Taking the Reins of Your Family Finances

Guest post by: Theodore Henderson

Article Overview: Every day in America, the Chief Financial Officers of corporate America make decisions that can help increase revenues, decrease expenses and directly affect the lives of employees who depend on their jobs to feed their families and fuel their lifestyles.

Taking the Reins of Your Family Finances

Every day in America, the Chief Financial Officers of corporate America make decisions that can help increase revenues, decrease expenses and directly affect the lives of employees who depend on their jobs to feed their families and fuel their lifestyles.

In the same way, you function as your family’s CFO. You look for ways to increase revenues by earning more money, decrease expenses by creating and keeping to a budget and keep your family fed and housed.

Here are some tips to help you keep your finances on track in these very troubling times.

1. Determine your actual cash flow.This requires that you sit down with your bank statements and your pay stubsif you don’t have direct deposit. Take your total take-home net income after taxes, insurance and anything else that may be subtracted from your paycheck. Once you have your total NET income you will need to subtract your expenses that will range all the way from your mortgage to the Starbucks coffees that you purchase each month. You cannot budget without being completely honest with yourself!
2. Be as thorough as possible when listing your monthly expenditures.Adding up your fixed expenses such as mortgage, auto payment, credit card payments, etc., is the easy part. Adding the variable bills such as utilities, water, gas expenses, etc., can be a little trickier but by averaging them out you will be able to come up with a good sense of what you should budget for each month. Finally, be sure to include those easy-to-foget expenses: the occasional coffee, restaurant meal, gifts to family and friends, entertainment and more. Only when you have a clear picture of all of your monthly expenses will you get an accurate picture of your actual cash flow.
3. Identify your disposable income by subtracting your liabilities from your income. What is left is your disposable income. These days, it is not a bad idea to save as much of that as you can! Consider ways in which you can use make of this disposable income grow to meet future financial goals.
4. Act as your family’s risk manager.Part of a CFO’s duties is to protect assets. As the CFO of your family, look to see what assets need to be protected, including your home. Do you have adequate life insurance to protect your family home financially if something happens to you?
5. Create a family budget or strategy. After completing the above exercises, you know know many of the financial specifics of your family’s cash flow which allows you to create a workable budget that will stand you in good stead in these very tough financial times.

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