The daily management of a budget is crucial from a young age. It's not just about monitoring income and expenses. It requires rigor and discipline to anticipate the future and realize new projects. The EPB team is delighted to present you with some practical tips to facilitate the daily management of the family budget. Although this concept may initially seem intimidating, proper planning makes it more accessible. We invite you to follow the following 5 essential steps that will help you establish and maintain a strong family budget with the motto "ANTICIPATE!"
Step 1: Identify the sources of household income
Take into account all monthly sources of income, including salaries, allowances, and other sources of income (all kinds of assistance). Here are some examples:
Salary and wages (if employed)
Internship income
Scholarship
Pocket money
Social benefits, grants
Rental income
Securities income
Sales of items
Family assistance,
Friendly assistance, etc.
Step 2: Expenses
2.1. Identify the expenses that we will refer to here as "fixed charges"
It is worth noting that fixed charges are difficult to adjust. However, it is important to know them precisely. To help you identify them, here is a non-exhaustive list:
Utility bills: electricity, water, gas,
Internet subscription, telephone,
Insurances: health, life accidents, car, motorcycle, primary residence, rental property, secondary residence, legal protection, any other insurance and policy...
Loan repayments: real estate, consumer loans, or other such as on credit cards…
Transportation: transportation card, fuel
2.2. Identify the expenses that we will refer to here as "variable charges"
It is worth noting that these charges can vary. Make sure always to ask yourself about the usefulness of these expenses. Therefore, identify areas where savings can be made. To help you identify them, here are some examples:
Various taxes, fines,
Entertainment: Netflix, gym, outings, cinema
Grocery shopping, medications, clothing, grooming, gifts, etc.
Exceptional expenses / unforeseen events: various taxes, fines, car repairs, household appliances;
Business: newsletter subscription, advertising, etc.;
Culture / Entertainment: cinema, concerts, books, theater, museum;
Food: groceries, restaurants, Uber Eats / Deliveroo, etc.;
Health: medical appointments, treatments, medications;
Shopping: Hi-Tech, clothing, grooming, gifts, etc.
Subscription: Netflix, Spotify, gyms;
Transportation: Uber / Taxi;
Travel / Relaxation: Plane, hotel / Airbnb, Train, Spa
Step 3: Calculate your balance living income or what we call the "Residual Quotient"
Add up all monthly incomes
Add up all monthly expenses
If incomes exceed expenses, that's good news! You can consider increasing your savings or paying off debts more quickly.
If expenses exceed income, it's time to review your budget and find ways to reduce expenses or increase your income. Set financial priorities as a family. Discuss and differentiate between "NEEDS" versus "WANTS" and make informed decisions about discretionary spending. For example, if holidays are a priority, maybe sacrifice restaurant outings.
Step 4: Savings & Diversification of Savings
After listing all incomes on one side, all charges on the other, as well as all "unnecessary" expenses that we can avoid, establish savings goals. To do this, you must define an amount to allocate to savings. This amount can be divided into several types of savings. Create specific savings accounts for each goal. Automate transfers to these accounts as soon as your incomes are received.
Here is an example of distribution you can adopt and an example financial product on which to save each month:
Emergency savings (set aside for emergencies) -> Savings account “Livret A” / Youth Savings Account “Livret Jeune”/ Livret de Développement Durable (ex. Codevi) /Livret Bleu / Livret B
Savings for short-term goals (vacations, purchase of a new electronic device, etc.) -> Compte Épargne Logement / Plan Épargne Logement
Savings for long-term goals (children's education, retirement, home purchase, investments) -> Assurance-vie / Compte-titres Ordinaire / Plan Épargne Actions
After defining the amount to allocate to different saving products, define the distribution of this amount between the following:
Short term: emergency funds to be mobilized quickly
Medium term: funds to touch only in case of need (prepare for higher education, travel, buy a car, etc.)
Long term: funds preferably not to touch (prepare for real estate project, retirement, succession)
Step 5: Self-discipline and tracking
Regularly monitor your budget and adjust as needed. Communication is essential. Organize regular family meetings to discuss the budget, financial goals, and necessary adjustments. Encourage the participation of all family members for collective financial management.
To track your budget, you have several solutions including the following examples:
Free and anonymous mobile application to track expenses and manage your budget: Pilote budget, Pilote dépenses, Mint, YNAB (You Need A Budget)
Spreadsheet or budget management apps
Monthly budget review
Comparison of actual expenses to forecasts
Adjustments if necessary (reduce discretionary spending)
We live in a society characterized by overconsumption, and despite our constant efforts in budget management, we remain constantly exposed to the temptation of consumption. Financial management stability remains fragile at all levels. Thus, it is imperative to adopt judicious practices not only to ensure our financial autonomy but also to instill good habits in our children and ensure the long-term well-being of our family.
By implementing the above, you will be able to create a solid foundation for managing your family budget. Be prepared to adjust your plan based on income fluctuations, changing family needs, and unexpected events. Responsible financial management is essential to establish stability and achieve family goals.
The 5 signals that should alert to us to budget issues:
Difficult end of the month: from the 15th or 20th of the month, it becomes difficult to buy essential groceries;
Increase in bank charges related to unpaid or rejected withdrawals (gap between incoming and outgoing charges);
Lack of control over the budget (example: when you say "I don't know where I am at anymore");
Difficulty in projecting life, projects, and when you say "there is no solution left for me";
Impulsive desire to spend small amounts.
Think about ways to optimize your budget by reducing non-essential expenses;
Identify areas where savings can be made without compromising your quality of life;
Track your monthly expenses and investments to stay on track with your financial goals and model the coming years.
Together, let's gain daily financial serenity!
