From running the household to managing finances, parenting comes with its share of challenges. Not to mention, the ability to manage our money effectively, despite all that life throws at us. The DFA reports that 31.8% of Australian households are in financial stress, with the debt-to-income ratio at 190%. This means that families owe at least double what they earn on monthly income. However, creating a family budget can help give you a complete understanding of your finances now and in the future.
Whether you need to save money for your child’s education, paying off your vehicle loan, or simply want to cut down on expenses, now’s the time to sort out a family monthly budget. This will help you organise your financial priorities and create balance in the household.
List Your Expenses
Get started by listing your monthly and yearly expenses. While most families focus on regular expenses, such as utilities and mortgage loans, even the smallest spending habits will add up. You can sort your spending into categories such as fixed and variable expenses. This will not only give you a better insight on where your money goes but also where it needs to be spent.
Use Your Credit Wisely
Most families use their credit card as a way to pay for bills in advance. However, many don’t often check the date when payments are due or even pay on time. As a result, the late charges can put a damper on your credit. Instead, take advantage of reward points and use your card for monthly groceries and continuous expenses. Not only will this help you stay on track of how much you spend per month, but it will also reduce the risks of extra interest charges and hefty late fees.
Set Smart Plans
Aside from building a financial routine, make it a habit of planning your meals ahead of time. Meal planning comes with plenty of advantages, such as saving time on shopping, prep work, and ultimately providing your family with healthy meals. Staying ahead of meal prep will also reduce the temptation to eat out or order delivery. Both of which can put a large bill on your monthly expenses.
Lastly, aim for future goals. Whatever plan that it may be – buying a new home, remodeling the kids’ room, or even a family vacation – sorting out a budget can help you find the discipline you need to build your savings. Reflect on the goals you and your family want to meet and make plans on how to solve it.
