Budget: family and personal
A family budget is a plan of income, expenses and savings that describes the capabilities of all family members in a certain period of time. A family financial plan is a long-term forecast of the family’s financial flows; with it you plan how much money you will earn over a certain period and how you will spend it.
A personal budget differs from a family budget mainly in that family resources are usually added up of salaries of two family members and are spent in at least three directions, while a personal budget is formed from one person’s income and is spent only on their needs. Thus, the table of monthly expenses in these two cases will differ dramatically.
How to calculate your budget
Wedding can become a debt that takes years to pay off. To avoid this, think over different, including cost-effective way for the celebration. See which costs can be cut and which ones can be eliminated. Allow for a cost overrun of 5-10%, such a cash cushion will definitely not hurt.
Setting a budget of renovation can help you save big. First, determine which renovation will give the greatest return on investment, for instance, kitchen renovation usually ranges from 10-15% of the cost. Then save on everything you can control, such as doing the work yourself instead of hiring a contractor, choosing inexpensive materials.
Having a child can consume up to 20% of a family's financial resources. This event requires planning, and budgeting your income and expenses can help. For example, in addition to diapers, there are purchases such as furniture, decor, and maternity clothes. And after childbirth, you may need the help of a babysitter or some additional procedures for mother and child. It is worth thinking about this in advance.
Financial goals should be specific, measurable, achievable, meaningful, and time-bound. For example, “I want to save up $1,000 for a vacation in 11 months” is a well-set goal. It meets all the conditions and is likely to be achieved.
Saving up with endowment
One of goals in the new financial year of Kazakhstani may be endowment life insurance, which is gradually becoming a market driver.
Endowment life insurance allows you to simultaneously insure your life and health and form savings, while ensuring the protection of your invested funds. Therefore, such programs can also be considered from the point of view of diversifying your investment portfolio.
Endowment allows you to save for education, an apartment, or start-up capital for your child’s majority. You can deposit funds one time or monthly, quarterly, or annually. Life and health are insured for the entire duration of the policy. In case of insurance event, the insurer will pay insurance benefit under the agreement or continue to make regular contributions for the person.
According to insurers, customers have not immediately showed interest in this product. Mixed feelings towards endowment were initially caused by the fact that the product was considered complicated. The trend of growing interest in endowment began to form in late 2021.
The principle of endowment operation is as follows: these are certain savings that require constant and disciplined replenishment over a designated period of time. For the entire period of validity of the contract, person’s life and health will be insured. The insurance benefit is paid in two cases: if the policy has expired or if an insured event occurs. In the first case, the company will return all deposited funds and add a guaranteed return. In the second case, the company pays the insurance payment to the beneficiary or continues to make insurance premiums for them. This plan is interesting for investment if all the requirements are met, i.e. the contribution period is quite long - from 5 to 15 years or more, and replenishments are regular.
The guaranteed return, in general, depends on size of the lump sum contribution, duration of the contract and risks included in the program. It is noted that the share of one-time fees is growing, due to clients’ wish to fix the current profitability for a long period.
Source: https://prodengi.kz/post/stavim-finansovye-celi-na-2024-god
Photos are from open sources.
