Having a good money management plan in place can be the light at the end of the tunnel for those who want to get your finances in order and to benefit your little ones in the future. If you have several bank accounts, credit cards, and savings, often getting to grips with your personal finances can feel like an uphill struggle.
Skills such as budgeting and investing for the future are hard to come by these days, so for those Mums who need little help managing finance, we’re here to help.
Tip 1: Set up a budget
Trying to live within your means is a lot easier said than done. If you spend more than you earn on a regular basis you’ll end up in debt and could risk not being prepared for life’s big changes or emergencies. If you spend less than you earn it will give you the freedom to save and be prepared for the future.
Set up a budget with your family in mind, noting how much you need to spend on important bills, then how much can be put into savings and spent on everyday expenses such as groceries or activities with the kids. Having this in place to update and refer to can help you manage your money a little better.
Tip 2: Understand your income
When it comes to income and expenses, most people know their full monthly income but have less knowledge when it comes to their monthly expenses. To work out how much you have left over once bills come out, you need to figure out your total expenses and subtract that from your total income for the month.
Here’s how it should look:
- If you end up with negative numbers, this means you’re spending more than you make and you need to take action by reducing your spending and expenses until your total reaches zero. See above for budgeting tips.
- If you end up with positive figures then this is good and means you’re spending less than you make. The only action you could take here is that if you’re in debt, you could increase your debt payments and clear this faster.
Tip 3: Plan for the future
Planning for your future doesn’t just mean your retirement. Put together an emergency fund that can help you out when it comes to unforeseen circumstances. Being organized with your money ahead of old age is important because you’ll have an increased risk of illness that could make managing your money difficult.
One of your sole focuses as a parent is making sure can provide for your children. This means providing the finances for your long-term care, getting a will sorted so probate fees aren’t too much of a problem, and covering the costs of your funeral. By regularly putting money into a savings account you can prevent these costs becoming a burden on your family.
Tip 4: Pay your bills on time
Once you know how much money you’ve got coming in and where it’s going, you can create a list of bills that need paying every month. By doing this, you can make sure you don’t miss a payment.
By making payments on time you can build your credit score and it will keep you from late fees, overdraft charges, and plenties.