According to CMC markets Brexit worries are weighing on the UK consumer. In these tough times, many families are struggling to manage their personal finances. We tend to shy away from discussing about family finances because it’s a touchy subject. It can be stressful not knowing you don’t have enough money to cover your household bills. Yet drawing up a budget is not difficult as it seems, providing you put in the time and effort.
Be Honest About your Finances
Find the time and place to sit down with your partner to discuss financial matters. It’s best to do it when there won’t be any interruptions or distractions, which might make it difficult to concentrate. The two of you can plot the way forward, involving the kids at times you see fit. You and your spouse should be frank about spending patterns. Do you for an example have credit card debt? Is your checking account overdrawn? Do you have a number of store cards? Do you have other debt your spouse does not know about? It’s time to play open cards. Blaming each other for your current financial predicament won’t solve your situation, and it is now time to accept everyone will have to make sacrifices and hard choices.
Starting your Budget
Drawing up a budget is not difficult as you may think. All you need is a pad or book to record your expenses and your income. Start by writing down your spending for food, rent, utilities, education, debit orders, EFTs, transport, and entertainment for the last month. Don’t forget to include the daily visits to the coffee shop and kid’s spending money. Be as thorough as you can. Then deduct total income from the expenses for that month. Congratulations! You have just completed your first budget. Now you can see were you are wasting money. That planned Paris trip will have to be cancelled because you won’t have enough money.
A Budget is a Work in Progress
Setting spending limits is one thing, keeping to them is another. It may take a period of time to adjust to living within a budget – don’t get stressed if there are overshoots. As you track your spending over weeks and months, you can see where money is being spent. When you create a family budget and give yourself spending guidelines, there’s an initial period of adjustment.
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Eating out regularly and going to the cinema often is costly and should cut out without hesitation. Instead read books as a family or play inexpensive games. Internet can be costly, so ration the amount time spent online. Sell stuff you don’t need, including that smart TV and get an entry level model instead. Downsizing can inject much needed funds into your bank account and bolster your budget for the time when you do need the money, like buying a car or renovating your home, or paying for college tuition. If you have a business, you can use surplus funds to buy equipment.
Use Cash Instead of Store and Credit Cards
Credit and store cards are the gateway to reckless spending and mounting debt. If you have to spend money, use cash. It is easy to keep track off, and you will definitely know when it’s finished – you won’t have money to spend! When you spend cash its easier to stay within your budget than if you had a card.
Need money for discretionary spending? Instead of going to the ATM, allocate fixed cash amounts. Give your kids a set daily allowance for their daily spending and weekly needs. The same should apply to you and your spouse. The both of you can discuss the amount you are comfortable with. This is an excellent way to stay within budget and valuable lesson to your children.
Investing Surplus Funds
Surplus money can be divided into short and long terms funds. Short term funds can be deposited in a high interest yielding bank for the short term. These funds can for be used in the event of an emergency. Long term funds can be invested in a stocks, bonds, and forex. Investing for the long term has proven to beat inflation, growing your money. Online platforms like CMC markets will gladly help you to understand the basics of investing and trading, whether you interested in forex or stocks.
Spend Within Your Means
Controlling your finances will remove a major portion of stress in your life and that of your family. Setting up a budget needs to be a family activity, which makes it possible for each member to see where and how money is being spent. By spending within your means, you can make ends meet and save money for the long term.