Raising a family can take unlimited resources, particularly financial. Parenting and household expenses can drain the family budget quicker than anything else.
It takes time to prepare a family budget and prioritise how and where money can be spent. It can also take organisation and commitment to stick to financial goals and objectives in helping to keep costs and the family budget under control.
Preparing a budget
- Simplicity is the key.Try to stick to preparing a budget using a method you feel comfortable with. Budgets can be prepared using software programs, Excel spreadsheets or handwritten lists. Go with whatever works for you.
- Plan your spending before you plan your budget.
- Don't complicate your budget with too many priorities.
- Set goals as a family and budget as a family.
- Be motivated in saving for special items and occasions.
- Seek help if your current debt is out of control. Professional financial advice may cost you money in the short term, but in the long term, may save you much anxiety and feelings of disempowerment.
- When you first prepare your budget, keep track of spending for the first few weeks.
- Consider savings an expense. Pay yourself a set percentage of combined income before you pay any other bills.
- Set a regular time to pay bills – weekly, fortnightly, monthly. Try to make this a time when you're not rushed, tired or easily distracted.
- Internet banking can be quick and efficient. Paying online can also mean that you are not constantly in a shopping area and tempted to spend money on incidentals.
- Reserve credit for major purchases and genuine emergencies, and occasionally pay in cash to reinforce the reality of how much is actually being spent.
- When paying bills, pay the amount as allocated in the budget. Try to resist part-payment.
- If possible, pay credit card accounts in full when they become due to avoid paying interest.
- Give priority to expenses that are fixed and ongoing – rates, utilities, insurances, mortgage repayments, rent, school fees, etc.
- Don't put what you may consider ‘the less urgent' priorities on the back burner. Give consideration to life insurance, disability insurance, health care, education savings, retirement savings and making a will.
- Build in a buffer for emergencies, unanticipated increases in utility bills and spontaneous spending.
- Allot extra to help pay off credit cards, rather than only paying the minimum monthly amount.
- Keep track of incidental spending – clothing, accessories, sport and entertaining.
- Allow for fluctuations in consumer items, particularly every day items such as petrol and food.
- Regularly monitor credit card statements, cheque books and other financial records.
- Allocate money to savings, once a debt is paid off.
Economising at home
- Leave credit cards at home unless you're going to be shopping.
- Do your homework and compare prices before buying white goods and appliances.
- Re-use plastic carry bags as bin liners and ice cream and yoghurt containers for storing leftovers in freezer or fridge.
- Wash and re-use plastic produce bags for freezer use.
- Go green with cleaning products. For more information http://www.thegreendirectory.com.au/
- Wash and reuse foil wrap, plastic wrap and plastic lunch bags.
- Use fresh vegetables, nuts or fruit, as opposed to muesli bars and other processed foods, to make healthy and inexpensive snacks.
- Check out the uniform swap shop at school and second hand text books for sale.
- Eat in regularly, take away occasionally.
- DIY where you can with regards to renovations and repairs. If you can't, swap expertise with family and friends.
- Shop for groceries after you've eaten, not before, and preferably shop on your own. Take a list and stick to it.
- Buy gifts and presents when goods are on special. Remember to remember where you've hidden them though!
- Buy food in bulk and repackage in plastic bags or containers.
- Encourage children to help you grow vegetables and herbs, either in garden beds or pots.
- Stock up on children's clothes at sale time. Most young children are unaware of brand names and for the most part fashionable items, so make the most of end of summer and mid winter sales.
- Join a toy library, or find a toy exchange or swap toys with friends and family.
- Enjoy time with your children in the local park, cricket in the backyard, cycling or walking the dog together.
- Hire videos and DVDs for an at home theatre night for your children and their friends.
- Cut down on fuel costs by car pooling to commute, walking to shops and the local milk bar, and catching public transport as often as possible.