Household spending: how to reduce and be closer to your dreams

Balancing household spending can be a challenge for many families. This is because, without planning and knowledge of your expenses, it is not possible to save. According to the latest Consumer Debt and Default Survey (Peic), 61.5% of households are indebted with loans, credit cards and overdrafts.

This scenario triggers many problems such as anxiety, stress and uncontrolled accumulation of expenses. However, this situation can be overcome with a good financial organization. Thus, the first step is to analyze the family dynamics as a whole and divide household spending.

What are household expenditures?

Blue world city has classified household expenses as all expenses related to home and family. These include grocery shopping, bills like water and electricity and even spending on personal items. These expenses can vary greatly from family to family and that is why it is important to always have them at the tip of the pen.

The importance of this financial control lies precisely in preventing the household’s accounts from getting out of control. Therefore, it is necessary to know how to control spending and keep the home’s economy in order. This prevents the appearance of debts and ensures greater financial stability and peace of mind for you.

Fixed expenses vs. varied expenses

When it comes to establishing a financial budget, it is important to know your expenses. That’s because, some people treat non-essential expenses as fixed expenses. Thus, fixed expenses are made up of water, electricity, telephone, internet, rent, cable TV and other services contracted by your family. These expenses, as the name says, are fixed, and every month you will have to pay them.

To have greater control over your expenses it is important to know how much they represent in your budget. The fixed costs, for example, must match ideally the maximum at 50% of your income. If they exceed that amount, it may be necessary to reevaluate your lifestyle to understand if you are living a standard above what you can afford.

Finally, so-called variable expenditures are those that are infrequent, but that compromise the budget. They can be those little day-to-day purchases and when they are not managed they end up with all the salary.

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Organizing household spending

The tip of several economists is to start by dividing expenses by groups. This method makes account management easier. Thus, it is possible to define what is essential, that is, what are necessary and unnecessary expenses. Keeping this in mind makes it easier to decide what can be cut out of the routine. In addition, it is possible to see the extent to which your money is being directed to unimportant items.

So, you can divide your household expenses into:

  • House expenses: rent, condominium, electricity, water, internet, telephone and gas;
  • Market: food, personal care products and cleaning products;
  • Transport: transport, gasoline and public transport applications;
  • Food: restaurants, snacks, fast food, etc;
  • Leisure: cinema and streaming services;
  • Education: children’s school, college, courses, school supplies, books;
  • Self-care: gym and beauty salon
  • Investments: life insurance, private pension, savings, emergency fund;
  • Taxes: IPTU, IPVA and Income Tax;
  • Health: health insurance, medicines, treatments.

In addition, it is important to remember expenses such as birthday gifts and pet expenses. It is worth remembering that this division is only a basis and can vary according to your family’s routine and habits. In short, the idea is to divide expenses into categories that meet your needs. The ideal is not to overdo the number of classes as this makes it difficult to final analysis of your budget.

After dividing all your cats into categories, you need to do a more accurate division. So, divide your expenses into three major groups:

  • Essential expenses;
  • Lifestyle;
  • Financial objective.

So, look at all the items on the first list and distribute them among these three groups. You can include market, education and health in essential expenditures, for example. For lifestyle, include spending on leisure and personal care. For the financial purpose it is important to list all debts that need to be paid or investments that you intend to make.

Household budget: set the ideal percentage

There are different methods for organizing your finances. One of them is to establish the ideal measure of spending in each group previously defined. To determine the percentage of each category, it is necessary to know its revenue well. Many families use the 50-30-20 rule. It determines a spending limit for each spending group.

Thus, 50% of the income must be directed towards essential and fixed expenses. Meanwhile, 30% is used for variable expenses, usually linked to lifestyle. The other 20% must be directed towards financial objectives, which will be used to achieve dreams and projects.

This technique is just a suggestion. That’s because, different families live different realities. Those who live on rent, for example, will have more essential expenses and this needs to be taken into account. The idea is to have this proportion as a base and not be too far from the rule.

Organize your finances

To understand your financial situation, you need to make a diagnosis. With this step by step it is possible to do it in a simple way:

Record your income

The first step is to add the income of all family members. This includes all income, such as salaries, fees, rental properties and others.

Raise all household expenses

Take the list you made with all fixed and variable monthly payments. Register in writing or in an Excel spreadsheet, but remember that this method needs to be easy for you to understand, so if you do not master the tool, the ideal is to register in writing. Do not forget to note expenses for leisure, meals outside and even gifts that you intend to give.

Categorize and group

Separate spending into categories. You can add up how much you are spending in each category. In this way it is possible to see if you are spending too much on expenses that are not essential.

Apply the 50-30-20 rule

The 50-30-20 rule is a great way to break down your spending as a percentage and define how much you can spend in each category. According to her, for a family that has R $ 3,500.00 as income, for example, the ideal is to spend up to R $ 1,750.00 in the essential category, up to R $ 1,050.00 in lifestyle and up to R $ 700.00 in objectives financial resources.

The analyzes that come from this organization allow greater control of your life. For example, from it it is possible to see if you are making few investments. This can compromise your family’s future and tranquility, as having a solid equity is the basis for a healthy financial life.

This proposed division was made based on the needs and consumption habits of Brazilians. In fact, families tend to spend more on housing, transportation and food. However, these expenses increase every year and that is why it is necessary to establish what is essential and what has already become exaggeration. Remember to keep your spending within budget.

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Tips to save on essential expenses

Reducing domestic spending can be a challenge. This is because, many families have only essential expenses in their budget, which makes it difficult to eliminate expenses, since there are no unnecessary bills. However, it is possible that some actions are implemented at home to reduce the costs of some accounts:


The electricity bill is usually one of the great villains of domestic spending. That’s because, it consumes a good part of the family budget. With the intense use of appliances and lamps that are often not economical, we are very dependent on electricity. However, this does not mean that it is not possible to save energy and reduce the value of bills.

Start using appliances with an economy seal. This is a simple way to lessen the impacts of consumption. In addition, choose to use LED lamps. They last longer and are more efficient. You can also consider using alternative energy sources like solar energy. If installing sunlight catching plates is a possibility for you, the investment will save you money in the long run since, by producing your own energy, you become independent of rates and tariff flags.


The use of water by a family is part of everyone’s routine. This is because it is part of everyone’s personal hygiene process, in preparing food, cleaning the house and washing clothes. Thus, it is common for this account to come with a higher value than expected. Thus, to reduce spending and preserve this resource, it is necessary to take some actions. You can start with the use of rain water to irrigate plants and wash the bathroom, for example.

To do this, simply install a cistern to capture with a filter. Thus, it is possible to separate the impurities that may be contained in the water. Another measure is to keep the tap closed while brushing your teeth and soaping the dishes. In addition, it is possible to use buckets instead of hose to perform some activities. If the bill continues to be very high, you can request the water meter exchange with the company responsible for the water supply in your city.

Unexpected spending

Even with a well-structured financial planning, we know that it is almost impossible to escape unexpected household expenses. This is because, it is not possible to predict problems in the car, a virus or even family visits that increase the average consumption of the bills. Thus, to mitigate the consequences for the budget a little, it is necessary to take certain precautions. They can involve avoiding installments with interest on the card, or even negotiating discounts can pay the bills in cash. At this point, saving part of the monthly income is also essential for situations like these.

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