Taking Care Of Your Family’s Finances

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Having a family puts a whole different spin on managing your finances. There’s not just yourself to think of any more; there might be two different salaries coming in, but only one set of bills so working out who does what and where specific amounts go can be overwhelming and challenging to decide. There are more expenses too with the kids; holidays are more expensive, there are birthdays, Christmas, school trips, childcare and savings to consider as well.

Cutting Back

If you have a new or young family, then one of the first things that you will need to do is to cut back on your luxuries. There are significant financial implications of having a baby with all the required new equipment, but also it’s likely that your income is halved or less with someone taking time off work to look after the baby. There are a lot of adjustments that need to be made so if you can hold off on getting that new sofa, start cooking more instead of getting takeaways or cancel that gym membership then you’ll have some more cash in your pocket and more money to spend on the baby. Life will change anyway, there will be less going out for dinners and nights out, but there will be other priorities.

Talk To Your Partner

A problem shared is a problem halved so if you’re worried about your money then discuss this with your partner. You are a team and need to work together and aware of the issues and your new responsibilities; it will be far easier to tackle them together.

Set Family Goals

When managing your own finances, you will be used to thinking about your goals, but now you have a family, you need to think about the whole family’s goals. That could still be getting out of debt, but also it’s probably more important than ever to have an emergency fund and to be able to save more money for more significant expenses like family holidays. Once you have some goals in mind for what you want to achieve with your money or how much you’re trying to save in a certain amount of time, it helps you to focus on that rather than just aimlessly saving. Having a goal to work towards will stop you from dipping into your savings here and there and then ending up with it disappearing without you even realizing it. If you can keep your eyes on the prize, know what you’re working towards, then you’re more likely to achieve it.   

Budget

Once you know what it is that you want to achieve and the time frame you want to achieve it in,  you can make a monthly plan. Work out what your family needs each month and understand what you are spending and what you need to spend, then you can make a budget for each month and stick to it. It might feel restrictive at first but actually, if you stop spending money without thinking about it, then you’ll soon realize you have far more financial freedom than you’ve ever had before. It’s important to let your kids know that there’s not an unlimited amount of money and that you have to work for it. Do this from a young age to get your children to understand the value of things as well as understanding that managing money is something that they will one day need to know and learn.

Start Saving

Once you have worked out your budget and you know what you have left, you can start to put some money away into a savings account. Choose wisely and pick one with reasonable interest rates and one that you automatically transfer money to each month.

Invest Your Money

Depending on how much money you have and what your family’s outgoings are, if you do have some leftover, then it’s a good idea not only to put your money away and have it build up gradually but to invest it and help it grow quicker while keeping it safe. Educate yourself on investing in stocks, start-ups, property, gold, or bonds. If you already have some knowledge of the property market, for example then use it to your advantage and put your money where you know it’s guaranteed to grow. Or if you have the time, then learn about it. Learn from the experts because you probably can’t afford a bad investment, who can?

Never Stop Learning

Managing money isn’t easy, and if you’ve now got more responsibilities and it’s not just about you, you’ll want to take fewer risks, so one of the most beneficial things you can do for yourself is to up your financial IQ by reading books on money management or investing. You could see an expert to get advice or buy some accounting software UK to help you manage your finances and teach you more ways to do it.

Keep An Emergency Pot

It is very advisable to have some funds which you can dip into should any emergencies arise. Getting your car fixed if it breaks down or getting a new fridge if that packs in is more important now you have a family to think of. When it’s just you, you can survive but it’s not just you so be prepared always think about your family.

Learn to cook

You don’t have to be a top chef, but If you want to manage your money better then you must at least know how to prepare some basic staples and simple meals as this will cut back on how often you have to eat out. It can also be beneficial to plan your meals for the week as this will help create your grocery budget and eliminate random spending on extra food.

Save first, pay bills after

Set a goal for your savings and adjust your lifestyle accordingly. Do not set your saving goal to fit your lifestyle, or you will always be broke. Ideally, you should look at saving around 25 – 30% of your salary after taxes. Society today says to pay bills and then save, but if you want to get ahead financially and create real wealth, you must learn to pay yourself first.