We all know what family life should be like. It should be travelling as a group, seeing new places, doing craft and DIY projects together, and essentially enjoying the warm embrace of the clan. You can will that into existence through your own love and energy, but there’s one thing that can derail your quest for the ideal family life: your finances. Fail to keep your money in order and you’ll be putting your family’s prosperity at risk.
Birthday and Christmas Celebrations
You’ll always want to give your family members the very best birthday and christmas celebrations you can think of, but it’s important not to get carried away. Too many people place their entire festive spending on credit cards, and then spend the whole year paying them off. If you do this, you’re running the risk of your spending getting out of control. In any case, there’s no reason to spend thousands of dollars that you don’t have - not when there are so many inexpensive ways to celebrate Christmas and DIY gift ideas!
Where To Travel To Now?
Imagine if you could give your children an adventure they would remember for a lifetime. While they’ll have seen the world, eaten in the finest restaurants, and seen first hand many of the wonders of the world, you’ll have left yourself...utterly broke. There’s little doubt that everyone - parents and children both - can benefit from getting away from the familiar and travelling, but that doesn’t mean you should be spending money you don’t have. Instead, look at inexpensive travelling options, such as camping or volunteering through sites like Workaway - you’ll see new places and learn new skills.
The Right Size Home
There is an unwritten rule about buying a house that says you should buy as big a home as your budget allows. But this is a lie. To begin with, if you have a budget of $350,000, you’ll look for homes around that figure. And while looking, you might just see your “dream house” for sale at $375,000...and you convince yourself an extra $25,000 is no big deal. But it is a big deal, it is! Instead, think about what you really need from your home. How many bedrooms, communal areas, what size kitchen, etc, and make that work for you - not the budget. You might end up buying a home that’s worth $200,000 but absolutely perfect for your lifestyle and position.
Finances: Behind the Scenes
It’s not enough to just have a sense of the state of your finances. You need be on top of the facts of how they’re doing. You should be aware of your credit score, as this determines what credit and loans you’ll be eligible for in the future (and at what rates). If you’ve had financial difficulties in the past, you probably don’t want to know your credit score, but don’t despair even if it is bad: take a look at Lexington Law Firm review for 2017 - credit repair services and take the step to improve your score. Being on top of your finances also means cataloguing your monthly outgoings and incomings, being aware of every bill (and when they come out), and how much money is in your savings pot.
Upping the Ante
And talking of savings, it’s worth revisiting your savings strategy and seeing if you might be able to increase the amount that’s going into your savings account. Most people don’t save as much as they should, but this is a mistake - and you’ll notice it later on down the line, when you look at your savings account and are disappointed by what you see. Adding an extra $50 a month can have a big effect when it’s multiplied by years - and you’ll appreciate it much more than that one meal out that would cost you.
Dividing Where The Cash Goes
One of the best ways you can keep on top of your family’s finances is by building a budget that divides where your money goes. If 50% is to go on household bills and food, you might decide to put 30% away into a savings account and then have 20% for fun and recreation. By sticking to the percentages you create, you’ll be less likely to spend a little extra “just because”. You have a formula, so stick to it!
Sometimes, you need to spend money to protect your finances. Trying to save on insurance is a mistake. Consider this: if you were to travel overseas and had an accident in the mountains but didn’t have insurance, you’d be paying for the (likely expensive) transfer to the hospital, treatment, and then alternative travel home all our of your own pocket. Similarly, if your scrimp on your home insurance and it was struck by a natural disaster, you’d have lost one of your valuable assets. In many ways, insurance is just as important as savings, and as it’s relatively affordable should be considered a necessity.
There’s a figure out that that says around half of Americans would struggle to find $400 if they needed it in an emergency, such as carrying out urgent home repairs or fixing their car. You won’t have to include yourself in that number if you have an emergency pot. This should be different from your savings pot, and is to be used for those expensive, one off payments. A broken boiler isn’t the most glamorous thing to save for, but it’ll stop you putting the bill on credit!
Is Investing the Key?
Believe it or not, there is such a thing as having too much savings. If you’re doing absolutely everything by the book, you could end up in a situation where you have tens of thousands of dollars piled away. In that event, it’s better to look at investing your money so that you get a higher return on your cash, which can’t grow if it’s not planted. It’s risky, however, so make sure you speak to your financial advisor before making any decisions.