Financial Advisor, Kartik Jhaveri gives you some simple tips to manage your finances smoothly and effectively if you happen to stay in a joint family.

Decide a Monthly Budget

This is the first and foremost thing to do. Do not create a tight budget where you only create a pool for finances to meet the most basic of needs. So estimate a budget that is atleast two to three percent more than you require so that you have a back up for unexpected expenses.

Now based on this and the number of earning family members decide amicably to split the share the total amount.

Do not include your personal expenditure in the family expenses, such as personal shopping for clothes and luxury or fees for your children's education including your and spouse's and kids health related expenses.

Things to Fund

The expense budget should fund miscellaneous expenses like electricity, water, society, maintenance, phone bills, groceries, washing detergents, servant salary etc.

When it comes to additional and not so frequent expenses such as home renovation or furnishing or festivals - keep a separate budget for that. Do not club it with the common monthly expenditure.

Medical Cover

This again shouldn't be included in the common expense pool. This is more or less individual choice. If your parents don't have a medical cover you can either club it under your insurance cover or take a separate one for them.

It is also applicable to income for people in the family who do not have any source of income. Whether you gift them personally or as a group is better left to your and your family's discretion.