A Comprehensive Guide To Family Finance

Being in control of your finances when you have a family is crucial. You have mouths to feed, after all, so making sure you have enough cash to do that is very important. You also need to make sure you have what you need to shelter and clothe your family. If you have money left over for fun and luxuries, that’s awesome too! This comprehensive guide to family finance will help you to stay in control and enjoy your lives together:

Know Your Numbers

Knowing your numbers is absolutely essential if you want to get a handle on your family finances. Keeping track of everything can be difficult, so it might be useful for you to download an app or even create your own spreadsheet on the computer. You should know exactly what you have coming in and what’s going out. This will allow you to create a family budget to stick to, so you never end up in your overdraft or wondering how you’ll pay for a new pair of school shoes. Finding the best budgeting and personal finance apps could quite literally change your life.

Make Sure You’re Spending Less Than You Earn

The key to staying on top of your family finance is to spend less than you earn. It’s that simple. This allows you to put money away, and buy everything you need to live comfortably. If you’re spending more than you earn, you might be able to keep it up for a while with credit and cards, but it will land you in trouble eventually. This is why knowing your numbers, as outlined above, is crucial. Careful family financial planning is key. Here are some practical ways to start spending less than you earn:

  • Work out your priorities.
  • Ask yourself whether you really need what you’re about to buy.
  • Work out what something would cost in hours if you were to work for it.
  • Don’t go shopping randomly to help avoid temptation.
  • Make lists and stick to them.
  • Give yourself pocket money.
  • Save money by making your own cleaning products, beauty products, and anything else you can think of. You can find tutorials online!

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Figure Out Where You Can Make Savings

Take a look at your spending habits and figure out where you can make savings, if you’d like more money for activities and luxuries. Maybe you could get rid of that gym membership you never ever use, or even just switch supermarkets. You could swap brands of certain items, and even take a look at your bill providers to work out where you could be saving. Sometimes, they’ll offer you a better deal if you say you’re going to leave. Figuring out where you can make savings will add to your spending budget so you can have more fun together.

Never Buy On Impulse

Buying on impulse can give us the instant gratification that we sometimes crave, but that soon wears off. Once we’ve bought that dress we didn’t need, we end up feeling guilty. Worst of all, we might only wear it once, or not at all! You should definitely sleep on your purchasing decisions if it’s over a certain amount. In fact, some say you should wait a couple of weeks before deciding whether to buy something you have your eye on. If the feeling of wanting the item fades, chances are, the novelty would have worn off in the end anyway.

Teach Your Kids The Importance Of Being Smart Financially

You should always teach your kids the importance of being smart financially too. You can tell them, of course, but you teach them with your actions just as much as your words. They look up to you and mimic you, so make sure you’re showing them how to act. There are a number of ways you can teach your kids about money from an early age too. You can give them an allowance, and even load it onto a card so they can save it or spend it as they see fit. The benefits of having a card are vast, but one is that you can see where they are spending their money. They’ll be forced to think about purchases more carefully if you give them an allowance, rather than deciding for yourself whether you want to buy them a certain item or not. This will allow them to become smarter when it comes to money and understand the value better. It improves so many other skills too! Here are some tips on starting your kids young:

  • Rather than give them money when they are very young, give them coupons. You can even do things like give them coupons to redeem when they want to watch a film. When you finally give them an allowance, they’ll understand how it works!
  • Be consistent with the allowance you give them. Some decide to give an allowance based on household chores, some decide to keep the two separate. However you decide to do it, make sure you’re consistent with it.
  • Save using a clear jar so they can see their money pile up.
  • Give teenagers their own bank accounts and encourage them to find jobs.

Don’t Buy Something If You Can’t Afford It

If you can’t afford something, don’t buy it. This might seem like common sense, but many people take out credit cards and go on shopping sprees that they can’t afford. Unless you truly need something, like a new washing machine, you shouldn’t put yourself in debt or financial trouble to buy it. If you do need to buy something in an emergency, make sure you research the best way for you to do so.

Set Ground Rules With Your Money

If you share your finances with your partner, you should both set ground rules when it comes to money. For instance, not buying something worth more than a certain amount without discussing it properly first.This should help you both to avoid arguments over finances and keep you out of the red.

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Talk Openly

Talking openly about money, rather than keeping secrets is the way to avoid arguments and live a happier life. You shouldn’t buy a new pair of shoes and then hide them from your partner, nor should they stash cash away for a boys night out without telling you about it. Make sure you both feel safe in your environment to discuss your finances and figure out any issues you may have.

Figure Out A Way To Pay That Suits You

Different families find that different ways to pay the bills and luxuries suits them. Some have one account that they share, and everything comes out of this. Some have ‘yours, mine, and ours’ accounts, that mean all of the essentials are paid for fairly while you both get spending money. Some just split costs down the middle and have their own accounts. You should look into the pros and cons of each option for you and decide on a method that suits you best. Trust is of huge importance when sorting out your finances as a family, so make sure you have that too.

Paying Off Debts And Cards

If you have any outstanding debts and cards already, working out a way to pay these off ASAP is in your best interests. Paying off the highest interest accumulating debts first makes a lot of sense, but this can seem like it’s taking too long for some. Some prefer to pay off the smaller debts first so they feel as if they have less to contend with. There are many methods for paying off your debts, so make sure you look into the best way to go about it for you. You can even get a consolidation loan that pays your debts off for you, so you only have one price to pay to one company each month.

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Save Money Each Month

When you’re spending less than you earn each month, save some money. All families should have a cash cushion behind them for the future. You never know what’s going to happen, so ensuring you could live comfortably in the event of an emergency is the smart thing to do. Having multiple savings accounts will allow you to save for things like vacations and emergencies.

Plan Fun Family Activities Early On

Planning fun family activities early on allows you to save money. Plus, the sooner you book activities, the more money you could potentially save. For instance, booking a vacation in advance could get you a hefty discount than if you were to wait closer to the time of travel. Leaving plenty of time for you all to prepare and save will ensure you have the best time.
With this comprehensive guide to family finance, you should be able to keep things in check. Your kids will learn the value of money and develop many more skills. Plus, you’ll all be able to do fun things together and live comfortably. What more could you want for your family? If you have any tips you’d like to add, leave a comment!

Comments

  1. Thank you for the great tip, I have never use an apt or spread sheet to balance my budget. I just write it down in a little book, an apt would be a lot easier.

  2. Thanks for the tips!! Shame so many people in this world overspend in the effords to have the latest and greatest things??!!

  3. Victoria Ess says

    This is a really well-written guide. Thanks for sharing it!

  4. Yeah for years we lived with the motto, do I need it or do I want it. Always hard to know what bill to pay first when you make min wage and live paychque to paychque, thts for sure.

  5. “Make Sure You’re Spending Less Than You Earn”

    If everyone could just follow this simple rule… it seems so obvious and yet so many people fail to actually do it. Living above your means is never a good thing.

  6. ajmoneymatters says

    Love the suggestions on helping kids to be financially smart. Such a great way to start at a younger age and teach kids about the value of money!

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