[Economics] Tips to manage the 5 invisible expenses that can harm the finances of the home

[#Steeven.™]

With the pandemic it is necessary to use money wisely.

The pandemic and the lack of economic movement in the country have affected citizens in one way or another. Although several families have lost or reduced their source of income, it is important to have control over family finances, thereby allowing the proper flow of money and encouraging savings.

One of the great enemies of the family economy are invisible expenses. "These expenses are imperceptible as they are individually small amounts, but together add up to a significant amount each month, causing an imbalance in the family economy," explains Elizabeth Arellano, executive of Produbanco's Learn Financial Education Program.

Family finances have some factors such as income, expenses, assets, liabilities and a series of economic risks that can influence the economy.

"To keep family finances balanced, it is necessary to follow a complete process, which involves planning, self-assessment, goal setting, execution of certain activities, monitoring, evaluation, and measurement of our movements," says the dean and Professor of Finance at the Universidad del Río, Francisco Parodi.

 

Types of invisible expenses

• Entertainment: Generally related to products or services that can be dispensed with or contracted in conjunction with other people, for example: video or music streaming platforms, mobile phone packages.
• “There are also some high expenses on family outings that can be avoided. For example, paying for breakfast, lunch and snacks on a short trip can be expensive for a family of more than three members. However, this money can be saved by bringing food from home and previously purchased healthy snacks”, explains specialist Arellano.
• Online shopping: “The key is to make the necessary purchases and essential products in a single virtual store. Thus, a single rate is paid for shipping costs and commissions”, says Elizabeth Arellano. In addition, orders to restaurants can be reduced.
• Impulsive expenses: Here come situations such as the purchase of sweets or clothing that are not necessary.
• Expenses due to carelessness: "These respond to situations that can be avoided, but when they are not, they generate economic losses," says the Arellano specialist. For example, late payments on credit cards or traffic fines.
   

How to maintain family finances

It is recommended to follow the PERC method:

• Postpone: It consists of postponing expenses or purchases that are not immediate needs.
• Eliminate: It refers to identifying unnecessary items and allocating them to other productive purposes (lowering the level of debt or creating an emergency fund).
• Reduce: All the values in which it is possible to reduce the allocated budget, establishing limits for each month.
• Keep: Necessary expenses such as housing, food, transportation, health, education.

Remember that the best way to maintain a healthy economy at home is to plan expenses based on income. This time of pandemic due to the coronavirus has been a situation that has allowed all of humanity to evaluate new possibilities to maintain the economy, especially in homes where jobs have been lost.

For this reason, the Arellano specialist advises putting smart consumption into practice, that is, making the right decisions when buying a good or service by comparing and analyzing prices and alternatives. The key is to choose only the essentials and those that offer the best benefits.

Avoid impulse purchases, since these generally do not obey a need but a taste or factors such as low price, advertising or recommendation.

 

https://www.eluniverso.com/noticias/economia/consejos-para-administrar-los-5-gastos-invisibles-que-pueden-perjudicar-las-finanzas-del-hogar-nota/