How to manage your family finances in 2020

Having a family is a complicated and expensive business. Before your first baby is even born, the costs of being a parent will start to accumulate. As time goes on, these costs will add up.

If you don’t have a plan in place for managing your finances better, you could find yourself dealing with the severe stress that comes from having no money.

Many new parents struggle to manage their finances effectively, especially those that aren’t great at managing money to begin with. They need guidance to rein in their spending to affordable levels. Below are some simple tips that any parent can use to manage their family finances better.

Budgeting

Learning to budget properly is one of the most important things you can do for your family finances. There are numerous apps and websites out there designed to help families manage their budgets. But one of the best things about learning to budget is that you don’t need any existing knowledge or tools.

If you have never budgeted before, it can be hard to know where to begin. Before you can put together a realistic budget, you need to know how much money you have coming in and going out every month. Once you have this information in hand, you will know exactly how much money you have to work with.

Divide your expenditures into your needs and wants. Needs are the things that are absolutely essential to the well-being of you and your family. These essentials include things like your fuel and transport costs, housing or accommodation costs, food and grocery costs, and utility bills. Once you know exactly what you are spending your money on, you can begin prioritising it more appropriately.

Budgeting for a family is more complicated than budgeting individually. For example, if you have two children, every activity essentially costs you twice as much. This difference can make even the simplest of spontaneous activities relatively expensive.

Research every purchase

Having a baby is expensive enough as it is. If you are paying over the odds for essential purchases, you are only going to be making things harder for yourself. Before making any purchase, large or small, make sure you research to find the best price possible. If you don’t go looking for deals, you won’t know they’re out there. Once you have set yourself a firm budget, you then need to make an effort to stay within these limits. Doing your research before making a purchase will make this much easier.

There are plenty of websites dedicated to helping you find the best deals. There are numerous voucher and coupon websites that provide discount codes and coupons that can be used online and offline. Before you make an online purchase, it is always worth checking to see if there are any discount codes available. A simple Google search will reveal these. You can also install a browser extension that will find them automatically for you.

Buy in bulk

From nappies to baby food, you can save yourself money by buying most products in bulk. Anything that has a long shelf life and you will need to buy regularly is worth bulk buying. Of course, you will need room to store your purchases if you decide to purchase in bulk. But if you can make the space, the money savings are more than worth it.

Both baby products and household essentials are ideal targets for bulk buying. For the best wholesale and bulk buying deals, you will need to look online.

Consider your financing options

If you find yourself in financial difficulties, there are always options available to you. Many people have networks of family and friends they can’t rely on, but not everyone is this lucky. If you need to turn to financial institutions or other lenders; it is worth knowing your options beforehand.

There are numerous types of loans and financing available today. New Horizons has a guide to finance credit options for parents. Whether you need to use these finance credit options or not, it is worth knowing what is out there. New Horizons is a fully accredited broker who can help you find the right loan for your needs. There is no credit footprint application, and 90% of applicants are ultimately accepted. If you need a financial boost, New Horizons can help you find the right loan deal.

Make sure you are getting the best deals on household utilities

For many households, utility costs account for a significant portion of their essential spending. Anything that you can do to reduce these costs is worth pursuing. Fortunately, there is a simple way of finding out whether you are paying too much for your utilities.

There is now a plethora of price comparison websites dedicated to utilities. From your broadband connection to your electricity provider, price comparison websites will immediately tell you who serves your area and how much they will charge.

Get your insurance and will in order

If you don’t currently have any insurance, you are leaving yourself exposed financially. You never know when the unexpected is going to cause potentially serious ramifications in your life. The only way the keeping your finances safe is to prepare ahead of time by purchasing insurance.

There are numerous types of insurance out there for you to choose from. Depending on your available budget, you might need to prioritise which types of insurance you need and which you leave. It is always useful to have some form of income protection or insurance as a parent. The Covid-19 pandemic has shown just how quickly the economy can deteriorate, with people finding themselves facing a situation they never thought they would be in.

You should also consider taking out a life insurance policy for you and your partner. This policy will ensure that your dependents receive some form of financial protection should something happen to you both. Similarly, it is a good idea to write a will once you have children, so you can be sure that your assets will be distributed appropriately.

Be flexible

Many parents today work as well as raise a family. However, you should not feel any pressure to find a job; it is entirely up to you what you do. But the more flexible and willing to adapt you are, the easier it’s going to be staying on top of your family’s finances.

For most families, the most expensive part of raising a child is the period before their education starts. Once they are in full-time education, the school provides food and daycare during the week. Until this point, parents have to shoulder these costs themselves.

Good financial management doesn’t come naturally to everyone. For some people, staying on top of money and managing it appropriately is a real struggle. Fortunately, with just a little guidance, anyone can learn to manage their money more effectively. Budgeting for a family is more complicated than budgeting for an individual, but it is still a useful tool. With your budget in place, you can then work on reducing your spending until it is within your target range.

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