Is your family experiencing financial struggles or you simply want to improve your financial situation? If you take a look at what the family is bringing in each month and spending, it’s easy to see which areas could use improvement (If you’re honest with yourself here). Here are some steps you can take to budget better as a family, tips on how to make more of your money stay in the family and how to put extra money to good use.
Tracking Spending & Creating a Budget
Spend one or two months tracking your regular spending habits and the bills you pay. Once you’ve made a list and realize where your money is going, you can start creating a monthly budget. The budget should list the cost needed to maintain your home, money spent on your debts and irregular spending so that you can see if you are spending too much on any areas such as entertainment, groceries, transportation and clothes. You might find that by carpooling, eating out less or buying clothes less often will save you a good chunk of money each month.
Pay Down Debt
Many families struggle with debt. They find that it’s taking up too much of their monthly income. If you are struggling to make the minimum payments or feel that you are not putting a dent in your debt, it might be wise to look into debt consolidation. Debt consolidation can take all of your debts and combine them into one, manageable loan. The cost each month will be lower and you’ll only have to pay one creditor once per month rather than paying multiple creditors a high minimum payment at a higher interest rate. This is one way to manage your debt and get it paid off within a scheduled timeframe. Once that debt is paid off, use the money you would have spent on the loan and start building your savings or put it towards a family need.
Make sure when you leave to shop that you only bring enough money for what you need. It’s easy to get distracted at the store or have the kids ask you for something that wasn’t on your list. If you only bring enough money for the items on your list, you can tell the kids and yourself that there isn’t enough money for anything extra.
Research One Bill Each Month
One tip your family could try is looking into one bill each month to see if it’s worth the expense. Most likely the majority of your bills are necessary expenses, but you might even find that the insurance on your car could be cheaper for the same coverage with another provider. Look into your phone service, insurance, cable and all other bills to make sure you’re getting the best deal.
Change Your Family’s Habits
Instead of buying everything new, consider buying used items or off-brand. You’re getting the same product this way but for a better price. Buying items from a consignment shop will save you a fortune and most of the items in those stores are in “like new” condition. Sign up for Freecycle – you can often get something for free that’s still in great shape and would have otherwise just ended up in the junk yard. Skip brand names at the grocery store and buy the off-brand since it usually tastes the same anyway.
Instead of paying for family activities, start looking into free things to do with the kids. Most libraries offer a free story time each week. You can walk around the park, eat a picnic rather than go out to lunch and send kids on playdates. Here are 50 ideas to give you a jumpstart on ideas.
Stop paying for luxury items like car washes, babysitters and dog grooming. Give your dog a bath, wash your own car and swap babysitting with friends.
If you have goals in mind as a family, this is the time to make a plan to save for them. Maybe your family wants to expand, one parent needs a new car or you want a bigger house. Start putting a percentage of your monthly income away for saving towards your family’s goals.
Now that you have realized where your money is going, are working on spending less and paying down your debts, your family will start to feel more financial freedom to save up for the things you want like that family vacation you’ve been dreaming about.