To all you parents out there, a question: have you found that since having kids your financial sense has taken a turn for the worse? Whether it’s baby brain or just a general lack of head space for dealing with money and the household finances, you might be surprised at how many moms go through exactly the same thing.
The trouble is, if you don’t notice you are getting behind with the finances, it’s highly likely you will also be getting behind on the bills. And given the extra expense of having children – raising your first child to 18 costs well over $250,000 – it’s no surprise that a lot of parents end up struggling. If this sounds familiar, read on – this guide should help busy moms and dads avoid debts, get into better habits, and completely simplify your household finances.
Draw up a budget
The first thing you need to do is draw up a complete budget. And let’s be clear – checking your account once a week to make sure your bills have gone out is NOT making a budget!
Jot down all your incomings such as your salary and child tax benefit, for example. Then write down all your outgoings – rent, utilities, food bill and repayments for loans. Finally, calculate the difference – the figure is the money you have spare for a month.
You can then attribute the remainder to your savings accounts, emergency funds, and put some aside for spending on treats. Ultimately, if you don’t manage your cash flow you will NEVER get on top of your spending.
Find unnecessary expenses
When you draw up a budget you should go through your finances with a fine tooth comb – and you might be surprised what you find. Are there any regular, unusual payments leaving your account every month? If so, stop them – it could be old cellphone insurance or some services you don’t use any more.
Take a look at all your bills, too. Could you save money by switching energy suppliers, or cutting the cord to your cable TV and using Netflix instead? And finally, take a look at your spending on meals out, trips away and any other unnecessary payments. Hopefully, you will find several areas where you can save, which you can use for far better reasons – saving for a vacation, for example, or paying off expensive debts.
The first time you do this can take quite a while, but if you check your expenses once every month or two you’ll find it gets done in no time at all.
When you have hundreds of payments going out of your bank accounts every year, it can be tough to track them all. And let’s be honest, services like insurance, utilities and banks/loan companies aren’t the best at keeping you informed when they make changes.
To make sure that you don’t get caught out by remaining with a service provider longer than needs be – when they up your rates automatically, for example – just set up some reminders on your smartphone. These little prompts will alert you when your introductory offers are ending, and you’ll be able to find other services with better deals.
OK, so I hope this helps you get back on track with your household finances. Feel free to share any other tips in the comments section below!