New Year, New Budget | 6 Family Budgeting Tips
Budgeting for your family and actively managing your money can allow you to plan and save for the future. It will give you peace of mind and allow you to avoid debt.
1. Complete a financial health check
A financial health check will give you a clear picture of your family finances and will help you identify where changes need to be made. You should do a financial health check at least once a year, particularly if your income changes or you are entering a new life stage.
2. Calculate all income
To get a clear picture of your finances, you need to know and list all income.
- Your payslip will show you what you earn from your employment.
- If you are getting social welfare benefits such as unemployment benefit and children’s allowance make sure to include these.
- If you have extra earnings that you would classify as income, such as interest on savings or investment income, include them too.
3. Calculate your outgoings
Tracking your outgoings can help you to categorise them as follows:
- Everyday expenses include coffees, lunches, taxis, cinema, pubs, phone credit etc. Keep receipts for each item you buy and enter the cost of the item in your weekly diary. Monitoring these over a week or month you will be amazed at how much you spend.
- Ongoing expenses - include rent, gas, electricity, TV, phone /broadband. (Your bank statements and regular bills will give you a good idea of how much you are spending). Loans & debts - As well as listing your monthly/weekly repayments, it is important to write down how much you still owe on your mortgage or loans and the time it will take to repay them in full.
- Savings - You may have regular savings in a deposit account or credit union. List all savings/ deposits you make regularly. To get a full picture of your finances, record the amount of money you have in all savings accounts as part of your financial health check.
- Miscellaneous Expenses - such as medical costs, insurance, holidays, birthdays or TV licence.
Any monies left over after reviewing your financial situation can be used effectively in paying off high interest loans early or opening a savings account to help you reach your goals. If you are spending more than your income, you need to think about how and where you can cut back.
4. Identify your goals
Whether it is saving for your children’s education, paying off credit card debt or starting an emergency fund. When you have a goal, you will find it easier to stick to a budget. Once your goal is identified, you need to work out how much it will cost and how you will achieve it. Your goals can be listed as follows:
- Short Term (save for a car / holiday)
- Medium Term (children’s education /home renovation)
- Long Term (Pension or pay off a mortgage early)
5. Plan a budget and keep to it
- Consider all household income, spending and other commitments.
- Be honest about the figures in your budget – don’t overestimate or underestimate your income or spending.
- Don’t include money from your savings as income – use regular income only.
- If you don't keep to your budget, don't be discouraged. Start again.
- Be realistic
6. Shop around, switch and save
- Shopping around for financial products ,current accounts, savings accounts, credit cards, loans, home and life insurance to help you compare the costs and benefits of these products.
- Look at how you manage your bills.
- Remember, small changes can amount to big savings.
Don’t leave it too late to Plan!
For further information please visit babystepsforyou.com or call our office at 01 6279495 where myself or a member of our team would be delighted to talk to you.