Surely more than once you have had to stretch your salary to be able to make ends meet with some food in your fridge. Or that time you had to tell your friends that you were sick when in fact you couldn’t afford the tickets for that concert they wanted to go to. This is a reality in all people and families and is related to home economics. But what is it actually?
Home economics in this post is not talking about the TV series; If you don’t know what home economics is, what its characteristics are, what it encompasses or how to improve it, you will surely find all the information you need here.
What is home economics?
Collins Dictionary defines Home economics as a school subject dealing with how to run a house well and efficiently.
The home economy, also called the family economy, refers to the expenses, income, savings and investments that take place in a known micro-environment, such as families (with one or several members).
In other words, we could say that it is the economic management of the home and family, in such a way that with one’s budget he faces the different expenses, consumption, savings, investments and whims that he had to.
An example of home economy that everyone understands is, without a doubt, the weekly purchase. A budget of the income earned is allocated to buy food. In such a way that if we go too far, we have to reduce expenses elsewhere to compensate.
The objective of home economics is none other than to achieve, based on income, to meet the needs of each member in terms of food, nutrition, clothing and footwear, health, housing, etc.
This falls not only on the person who earns the money, but also on who manages it (which can be the same person or another). To do this, you have to use tools and manage it in such a way that you can satisfy everyone and not get out of that “budget”, something that can sometimes be very difficult in this digital economy period even if you are savvy.
What Characterizes Home Economics
Now that you know what home economics is, finding out what its main characteristics are is not complicated. In this case we are talking about:
- It is focused only on households and families. This does not mean that if there is no family it does not work; in reality, home economics can also deal with single person who has a home.
- It is based on managing a budget to be able to divide the income into the different expenses, savings and investments that you have.
- It allows knowing what expenses and debts a person or family has and putting tools to try to reduce them to improve the economy.
Why is Home Economics so Important
Home economics is very important, and in fact it is a knowledge that should be taught from an early age. Imagine that you have a child who always asks you for things. And you buy them because you want to be a good father or mother.
The problem is that, as he grows up, he asks for more expensive things, and when you can’t satisfy that, the child don’t understand anymore because you have always given him what he’d wanted.
On the other hand, if you provide that child with a payment for performing a simple task, and ask him, with that money, to manage himself and be able to buy what he wants but without having more money until the following week, you will be helping him to see the importance of spending alone on what is priority and necessary to him, not on waste, and you will the child achieve better management.
That is the importance of home economics. It allows you to learn to manage the income you have to cover expenses and save; and, if it remains, to be able to give yourself some other luxuries or invest it in business.
But if you didn’t know how to manage it, as soon as you received the money you would end up spending it and getting into debt to the point of not being able to meet your expenses.
Areas that Home Economics Covers
Within the family economy, it is very important to keep in mind that it is not only in charge of income (the budget it has) and expenses, but it is in charge of different parts or areas, such as:
- Expenses . Very general, since they can come from the mortgage or rent of the house or garages, trips, clothes, insurance, etc.
- Consumption. Focused on those essential expenses: electricity, water, food…
- Investment. That area that focuses on what the person wants to invest a part of his money, for example in a pension fund.
- savings . A part of that income that is saved in case unforeseen events arise.
How to improve home economics
Imagine that you have a salary of N100,000, and that, when you put on the table the income (those 100,000 ) and the expenses, you find that, of the latter, you have N150,000 euros. That is, you spend more than you earn.
If you have saved, in principle nothing happens and you can remedy it. But, if this is not the case, and it is normal, you enter the red and, if you do not stop this excessive spending, you could end up losing your house, the car or even being sued for non-payment.
For this reason, knowing how to improve the home economy goes through a financial education that they do not give us and that we in Nigeria sometimes have to learn the hard way.
How to avoid it? With these tips:
1. always make notes
At the beginning of the month you have to make notes to know what income you have and what expenses you have. It is true that some will be fixed and others will depend on how the month goes, but for that very reason you have to know what you have to spend and what you spend.
This way you will try to stick to that budget you have. Nothing more.
2. save every month
Even if it is the minimum, but it is important that you save a part of that income you have for anything that may arise (an accident, a work that needs to be done, buying a car…).
According to the home economics rule, you should always save 20% of your income, leaving 50% for fixed expenses and 30% for those that arise in the month. But if nothing comes up, that money should also go into savings, if not all of it, then at least a large part of it.
3. Set savings goals
As we know that it is very difficult to save, especially with prices rising and everything being more expensive without income rising, setting small savings goals helps encourage this activity.
And it is that when you meet a goal, for example to save N10,000, it encourages you to return to have another higher goal . And when you see a positive balance in your account and that it is getting bigger and bigger, what you want is to keep increasing it.
It does not mean that you should be a “grabber” and not enjoy what you have achieved by working, but it does mean that you have a “head” and maintain adequate savings for the family you have. For what could happen.
Home economics is not difficult, you just have to carry it out in an organized and planned way to avoid problems.