Managing Your Home Economy: A Comprehensive Guide
Managing Your Home Economy
Annual Spending
Income: Annual Salary + Extra Pay + 2
Regular Expenses:
- Annual: Property Tax (IBI), Car Insurance, Home Insurance, Income Tax
- Bimonthly: Electricity, Water, Natural Gas
- Quarterly: Community Fees
- Monthly: Food, Hygiene, Personal Care, Home Supplies, School, Transportation, Life Insurance, Health Insurance, Phone, Other Costs, Unexpected Expenses, School Supplies
Detailed Family Analysis & Responsible Consumption
Understanding the economic, social, and environmental impact of our consumption behavior is crucial for responsible spending.
Recommendations for Better Use:
- Information
- Value for Money
- Advertising Awareness
Responsible Home Management
Managing a home effectively involves planning, organization, implementation, control, and decision-making regarding resource allocation. This ensures a well-maintained home and fulfills the basic needs of all members.
Household Economics
Household economics, or family economics, refers to the management of all assets within a family unit to meet the needs of its members.
Saving in the Domestic Economy
Deposits
Deposits are a common way to save. The bank safeguards your deposited amount and returns it upon request. The main types of deposits are:
- Current Account: Provides regular bank statements and allows check issuance.
- Savings Account: Records all transactions in a passbook. Generally doesn’t support checks and offers better remuneration than current accounts.
Debit Cards
Debit cards deduct the purchase amount directly from your linked account. Payment is declined if the balance is insufficient.
Credit Cards
Credit cards allow payments up to a pre-approved limit, with the balance due the following month.
Pension Plans
Pension plans are long-term savings systems that provide financial resources during retirement.
Administering the Domestic Economy
Effective administration involves planning, organizing, directing, executing, monitoring, and evaluating all monetary processes. Key objectives include:
- Identifying family needs
- Managing the family budget
- Understanding income sources and savings options
- Planning the family budget
- Prioritizing spending
- Controlling income and expenses
- Analyzing financial outlays
- Developing responsible consumption habits
- Recognizing the drawbacks of impulsive purchases
- Considering household members and their ages
Budgeting
Budget: A planning tool that estimates anticipated income and expenses over a specific period.
The difference between income and expenses results in a balance. A positive balance allows for additional spending or saving, while a negative balance leads to debt.
Savings in the Budget
Savings can be categorized as:
- Emergency Fund: Setting aside a monthly amount for unexpected events.
- Capital Investment: Investing in stocks, securities, or real estate.
- Resource Optimization: Minimizing unnecessary expenses like phone calls, electricity, water, and food waste.
Maslow’s Hierarchy of Needs
- Self-Actualization: Achieving personal fulfillment.
- Esteem: Self-respect and respect from others.
- Love/Belonging: Connection with family, friends, and community.
- Safety: Security of home, work, health, and personal well-being.
- Physiological: Basic needs like food, water, sleep, clothing, and hygiene.
Economic Needs
Economic needs can be classified as:
- Physical: Housing, clothing, footwear, transportation.
- Biological: Food, health, leisure.
- Social: Gifts, parties, clubs, associations.
- Cultural: Education, training, information, sports.
Needs and Consumption
Need: A requirement for something essential, be it material, psychological, or social.
Consumption: Utilizing goods and services for sustenance, livelihood, personal development, and training.
Needs and consumption are interconnected, as fulfilling a need often involves consuming a product or service.
Household Documentation: Invoices
Invoices provide detailed information about consumed products and their costs. Key aspects to consider:
- Issuer and type of consumption
- Verification of recipient and amount
- Consumption details
- Payment terms and return policy
- Customer service contact
- Additional information
- Advertising and bonus systems
Understanding Utility Bills
Electricity Bill Components
- Customer Data
- Consumption Data
- Billing Details
- Payment Information
- Customer Service
Electricity Bill Calculation
- Contracted Power
- Cost of Consumption
- Electricity Tax (subsidizes coal mining)
- Equipment Rental (meter)
- VAT (Value Added Tax)
- Total Invoice
Water Bill Components
- Domestic Tariff
- Fixed Fee (monthly or daily charge)
- Service Fee (water usage)
- Sewer Service Fee (maintenance of infrastructure)
- Taxes (funding for charges and autonomous communities)
Natural Gas Bill Components
- Customer Data
- Bank Data
- Consumption Data
- Billing Details
- Customer Service Phone Number
- Consumption (gas used in the last two months)
- Fixed Rate (charged regardless of consumption)
- Meter Rental
Phone Bill Components
- Subscription Charge (monthly fee for line maintenance or equipment rental)
- Call Charges (variable based on call duration and destination)
Creating a Budget
Effective budgeting involves:
- Determining Income
- Determining Expenses (fixed costs, variable costs, staples, secondary products)
- Comparing Income and Expenses
Self-Assessment
- An imbalance between needs and resources can lead to various problems (economic, criminal, psychological).
- Responsible consumption is synonymous with conscious consumption.
- A current account represents absolute liquidity.
- Current accounts allow check issuance.
- Debit cards require sufficient balance for payment, unlike credit cards.
- Appliance repair is considered an unforeseen expense.
- Higher expenses than income result in family debt.
- Bank commissions are not countable income.
- Housing-related expenses typically constitute the largest portion of a family budget.
- The taxable amount is the tax base.
- The domestic rate is not included in electricity bill calculations.
- Water supply and sewage services are referred to as shared services in a water bill.