According to the Office for National Statistics (ONS), the UK’s average weekly household spending was about £585.60 between April 2018 and March 2019. Proper management of family finances remains essential to domestic life for most parents. Since spending money is unavoidable, it is vital to create an appropriate budget to guide your spending, ensuring that you make ends meet easily. So, are you interested in helpful tips to guide your family budget creation? Consider the following points.
- Assess Your Current Financial Status
Several financial experts agree that a vital first step to planning a family budget is knowing how much money you are working with. To do this, accurately determine your monthly income considering salary and other income (like rent from a buy-to-let property). Then, determine your expenditure through account and credit card statements, noting down all bill payments, withdrawals, purchases, etc. It is essential to weigh your monthly income against your expenditure to find how the two balance each other. You can then split your expenditure into essential and non-essential spending to know how much your disposable income is and how best to manage it. This splitting also reveals critical areas where you can cut down cost.
- Manage Your Spending Wisely
After determining how much your family handles, you can now draw up a great plan that ensures that finances are used in the best ways possible. Essential costs like housing and transport take up the chunk of household spending, accounting for about 44% of total expenditure. As such, your budget should involve little tweaks that adjust both essential and non-essential spending. Changing your energy supplier, switching to a cheaper mobile plan, and using a less expensive TV package can save you several pounds annually.
Also, trim out any unnecessary expenses that are siphoning money from your current spending. Unused gym memberships, subscriptions for magazines you don’t read, etc., are areas where you can free up more funds. After eliminating these costs, find savvy ways to spend less without missing out on things you enjoy. For example, having a family car is essential for convenience and other fun activities. Purchasing any vehicles upfront may not be feasible due to budget constraints, so consider taking great contract hire deals on good family cars. For example, a reputable Vauxhall Combo dealer can get you excellent deals on a great family car, allowing you to enjoy the convenience of owning a car while spending wisely.
- Plan for Rainy Days
Unexpected bills are bound to pop up because they are an unavoidable aspect of domestic living. Although several families ignore this, designating funds for emergencies is a smart aspect of family budgeting that you must prioritize as a parent. Should you suddenly lose your job, need to foot unexpected costs like emergency medical bills, or face an urgent need to replace your boiler because it shuts down unexpectedly, you can count on your rainy-day funds to bail you out. This way, you can circumvent many sticky situations, avoiding debt and other inconveniences.
*this is a collaborative post*