5 top tips for getting your family finances organized
Money worries. Most people are bound to have had them at one point or another. They can be even more acute when you’re a family, and you’ve got so much to worry about when it comes to finances.
There are the basics, such as having enough money to keep a roof over your head and food in the fridge. There are treats, such as that family holiday and then there are future worries, such as helping to set up your kids for life by helping them to pay their way through university or get on the property ladder.
While it might seem impossible to ever completely escape financial concerns, there are a number of ways that you can try and get a grip of your finances so that the worries surrounding them don’t spend so much time eating you up.
Here are five top tips for getting your family finances organised.
Create a budget
Budgeting is the easiest way to get a grip of your family’s finances – and while it may sound complicated, it can actually be extremely straightforward. You don’t need to be a qualified accountant.
Start by writing down all the sources of income your family has each month. This will include salary, investments, rent, any money that comes into your bank account. Then, produce a list of everything you have to pay for each month. These are your fixed outgoings and costs that simply can’t be avoided. This will include bills, rent or mortgage payments, fees, insurance and food shopping. Paying council tax? Find out how to avoid paying council tax on property here.
Take away your expenditure total from your income, and that gives you your disposable income. This is the money you have left to spend on nonessentials, such as entertainment or holidays. Once you’ve worked out your income, expenditure and disposable income, you can look at ways of tweaking your budget.
If you think you are spending way too much on food shopping, you can look at ways to reduce that bill and channel the money saved into another area such as entertainment or holidays. You might realise that with cinema tickets at an all-time high, your weekly trip to the movies is unsustainable. Or, you might find out you’ve actually got more disposable income than your first thought, and your financial worries have been overblown.
Whatever the outcome, creating a budget will help give you an awareness and an element of control over what you are spending your money on.
Set aside savings by making them a fixed outgoing
It’s not something anybody wants to think of, but are you prepared for something bad happening? Say you or your partner lost their job or fell ill? Even something like a broken-down car or a busted boiler can provide a nasty surprise for our finances.
By setting money aside for savings, you’ll be giving yourself a pot to fall back on should you need it in the future. It doesn’t have to be much – even £100 a month could help – and once you’ve worked out your family budget, you’ll know how much of your disposable income you can afford to put aside.
There is one guaranteed way to ensure that you are saving and that is by making the savings pot a part of your fixed outgoings in that new family budget. That way, you’ve covered yourself each and every month should the worst happen. If the worst doesn’t happen, you’ve got a nice little bonus pot of cash squirreled away for a rainy day.
Keep a good credit report
On occasions, there will be unavoidable costs that you might not have the finances at the time to cover. When that happens, it could mean turning to a loan or credit company.
Having a good credit report is important should you ever need to go down this road. It will make it easier for you to borrow money and can even help secure you preferential rates of interest.
If you’re unsure about your credit rating, then you can find out about it using a company such as
Credit Karma, which has over sixty million members.
Pay your bills on time via direct debits
How many of us receive a letter or bill, open it, throw it in a drawer somewhere and then completely forget until the deadline for payment has already passed? You then have to pay a late payment fee, costing you more money and more concerningly, your credit rating takes a hit.
There is one easy way to avoid this, which is to set up direct debits or standing orders to tackle your bills on your behalf. No more letters, no more forgotten payments and no more worries.
A direct debit instructs your bank to allow a company to take money from your account, which is arguably the easiest way of managing your outgoings. That way, your gas, electric, water and mobile phone providers can simply take the amount you owe monthly from your account.
With a standing order, you set up a regular payment for a set period of time to a company or individual for a set amount. Say you need to pay off a loan for £1000. With a standing order, you can set up a payment of £100 to go out on the fifth of each month for 10 months, meaning you never have to worry about whether you’ve paid that bill again.
Take advantage of technology
It’s possible to run your family’s finances without even needing to visit a bank now thanks to technology.
Online banking is the easiest way to take advantage of the avenues opened by technology. It gives you access to your account 24 hours a day, 7 days a week. You can see what has gone out and what has come in from anywhere on the planet, be it during your lunch break at work, on the bus into town, even on the beach. Online banking gives us a level of control over our finances which instantly makes them far more organised than was ever possible.
There’s one other advantage to online banking – it also means that you don’t have to rely on paper statements which will often arrive in the post, be thrown in a drawer somewhere and never see the light of day again. Not only will you never lose track of your finances again, but you’ll also be helping to save the planet by aiding in the transition to a paperless society.