When you have a family, providing for them is a big concern. But it can seem like there is always something else to pay for, making it easy to run short some months or even get into debt. But it doesn't have to be that way. In fact to stay on top of your family finances, follow the advice below.
Keep to a budget
No one likes to feel that they are restricted all the time with their spending. But budgets are a cornerstone to getting your family's finances in control. The trick, though, is to make them realistic.
We can all set a budget that will leave us with thousands of pounds spare a month if no one does anything fun, and the entire family eats only toast every day! But that just isn't going to be something that you or the rest of the family can keep to for very long.
Instead, factor in amounts for things like social time, going out, and date nights. You should also make sure you factor in all the essential costs that you just can't do without for example car insurance, utilities, and rent. Once all that has been covered, it's much easier to see what you can legitimately have left over. This can be put into savings or used to pay off any outstanding debt.
Distinguish between need and want
Deciding whether you or another member of the family needs or wants an item is a great piece of advice. With our advert-saturated culture, it can be pretty easy to mistake the strong feeling of want with the smaller, more sensible voice that points to need. Remember just because your son feels like he has to have that pair of trainers doesn't mean he can't function without them.
Try not to fold under pressure from the kid to get them stuff by want as the sole factor. Explain to them that there is not an unlimited amount of money, so they have to be choosy with what they would like. It might be best to avoid taking them to do the grocery shopping too, as some stores have sweets and toys at the checkout to get kids to pressure their tired and hassled parents into buying them.
Of course, getting the kids to keep to a budget it's super hard, and they may moan and groan. But they will learn that they don't get new sneakers until they actually need them. Then you are teaching them a great financial lesson, as well as making a positive move for your own situation.
Consider a personal loan
Of course, sometimes those situations crop up, where we need some money to pay for something right there and then, but we just don't have it. This can be so frustrating when you are trying to keep to a strict budget, but you need to cut yourself some slack. Life isn't always predictable, and stuff happens.
Car radiators break down, the basement gets flooded, and someone takes a tumble and breaks a limb. These are perfectly good reasons to get a personal loan, as you need some money immediately to deal with a crisis situation. It's not like you can wait to sort these things until you save up for them! Just remember to apply the need or want criteria, and you should be okay.
It's common sense to save some money each month whether you are a family or a single person. However just because it’s common sense doesn't mean that everyone does it. In fact, most people live month to month paycheck to paycheck. Spending exactly what they are bringing in and in some cases even a little more. It seems to be a phenomenon where we fall into the trap of spending what we have. But if we do this all the time that means there is no money left for saving.
Saving is important for two reasons. Firstly it allows you to have a safety cushion, in case anything goes wrong, and you have to find some money quickly. Secondly, regularly saving means that you get into the habit of not spending everything you have. That means you can put some away to afford important items that are expensive. For example, it's much easier to pay for a vacation or the kid’s tuition fees if you have some money for the deposit tucked away.
The only time when saving is questionable is when you have a large amount of debt. Then it's more prudent to focus on paying off the debt first before you start saving up money because the debts will be costing you more.
Get a second income
A fantastic piece of advice for families that are struggling with their finances is to establish a second income. This can be through a traditional route, where one or both adults go out and get a second job. Although be aware, that this is tough to maintain over a long period of time, as it can be incredibly draining.
Or you can establish a second incline in a less traditional way. One of these ways is finding good quality items at flea markets and garage sales. You buy them at a low price and then resell them on auction sites for a profit. Or you can monetize your hobby and sell crochet blankets or other crafts through sites like Etsy.
You could even consider making a passive income. A passive income is where you create items like worksheets for budgeting, planning, or art pieces and sell them over the internet, usually via download.
The advantage of this is that you can sell multiples of the same item, over and over again. So you get to make the item once and sell it many times. Meaning that you are doing very little work (passive) for the number of sales you can expect.
Benefits and entitlements
Another essential piece of family finance advice is that you need to understand the entitlements you qualify for. Remember if you have children, in some states that affects how much you will have to pay your taxes. So make sure that you understand your state's laws, so you are not unnecessarily overpaying.