NOBODY can better understand what a home needs to function than a housewife or stay-at-home mom. But it is important that they balance what is needed with how much money is available.
Decades ago, there was generally one earner – the man of the house. His salary was what the home survived on. These days wives or even children who choose to live with their parents may also be working. It is important that a discussion is had to determine how much those earning a salary are willing to contribute to the household expenses. There is nothing wrong with such a discussion because it is only fair that those who consume also contribute.
The golden rule when it comes to budgeting is that you should never spend more than you earn. At best you should be able to save some money every month and at worst, what you spend should be equal to what you earn.
To get a clear picture of your expenses, draw up a budget of all that the household spends money on.
This may include, but is not limited to the following: Rent or rates, utilities (lights, water, sewage and refuse), telephone bills, television bills (DSTV or other streaming services). Medical expenses are also high and need to be budgeted for whether it is medical aid or money kept aside for medical emergencies as well as medication.
Travelling costs also need to be taken into account, which will include money for public transport or monthly car repayments, vehicle insurance as well as money for petrol.
Those who have pets also need to budget for food and vet bills. Suddenly groceries and detergents are proving to be major expenses for all households. Clothing is also something that needs to be budgeted for.
Once you have a budget, look at what expenses you can cut back on. Can you reduce your electricity bill by switching to gas or solar? Can you share household chores instead of hiring a helper? Can you renegotiate your cell phone contract and opt for a more affordable one? Can you negotiate a better rental or bond repayment?
Expenses need to be prioritised between what is necessary and what is nice-to-have. A bond repayment is a necessity, but a pizza night is a nice-to-have.
Drawing up a household budget is something everyone in the home should be involved in. The amount of money available for expenses should not be a secret – it is something all the adults living in the house should be aware of.
Every home needs that one person who reigns in spending and ensures that everything balances at the end of the month. Historically, in Indian homes that person was often the housewife or stay-at-home mom. It was their prudent management of the family finances that resulted in money being available to educate children or maintain the home. To some extent it is the bedrock upon which the Indian family in South Africa has progressed.
Today, our focus has become more I-centred rather than the we or family-focused generation of yester-year. But there are important lessons that we should hold onto from them. Not spending more than you earn is definitely one of them.
Ashika Devnarain is a financial planner and director at The Insurance Network in Queensburgh. She has been in the industry for 24 years and is running her brokerage for 17 years. The Insurance Network is contracted to all the major insurance companies and deal with the many different aspects of financial planning from medical aids and gap covers to life covers, investments and retirement planning. The Insurance Network can be contacted via WhatsApp at 083 385 0606 or email: [email protected]