What should be the distribution of family finance?

First of all, we need to clarify the situation of family property and their income, consolidate the existing property, they are divided into: loan repayment, savings, daily consumption, insurance, investment of these five parts, as far as possible to achieve the earmarking of funds, rather than mixed together.

Note that the order of allocation is this: loan repayment > savings > daily consumption > insurance > investment, more reasonable.

The first part, the money for loan repayment, including mortgage, car loan and other loans, etc., is recommended to account for about 20% of the family's monthly income, and try not to exceed 30%.

This is a rigid expenditure, you can use a special card, pay a salary first put the money to repay the loan.

The second part, is the daily consumption, you can put it in the current bank card or the balance, so that you can access it at any time, the proportion is generally 30% of the family's monthly income, to ensure that the short-term expenses such as food, clothing, housing and transportation every month.

You can also set the ratio according to your own actual situation, but be careful not to overspend too much.

The third part is the money for mandatory savings, which is also about 30%, to solve the problem of raising children, supporting parents and our own retirement as a couple in the future.

This part must be consistently saved every month, because it is the money that must be spent in the future, to ensure safety and certainty of return. The way to save can be a savings type of insurance, this is a long-term steady increase in value, but also can be a fund fixed investment, long term holding, security and income is also good.

The fourth part, is the life preservation money, for the configuration of protective insurance, including accident, critical illness, medical, life insurance, etc., generally accounted for 8% -10% of the family income.

The role of this account is to make a small profit to cope with unpredictable risks such as illnesses and accidents, and have enough money to save our lives and avoid losing our wealth overnight.

The fifth component is the money used to generate money, pulling up the total return, usually about 10 percent of our income, which can be added or subtracted according to risk appetite. Common investment methods are stocks, funds, real estate and so on, the return and risk is proportional, so be sure not to put eggs in a basket.

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Saving money and managing finances is a necessary part of family business, and the sooner we set up a financial concept, the sooner we can realize financial freedom.

Don't just know to let the money lying on the bank card, according to the above proportion to allocate, you can make every sum of money to maximize the value. Stick with it, and you're sure to receive great rewards in the future.