*This is a collaborative post sharing some advice on family finances we find work for us, that we hope you will find helpful*
Money and family finances are often a sore point for many people and whilst some people might be organized and sensible about how they manage their budgets and money, for others, it can be a stressful subject.
Keeping on top of spending, managing money and working out how to live with the income you earn is not taught as much in schools to older children as it should be. I am a firm believer that kids should leave home knowing how to cook and how to balance a basic budget and manage their money reasonably and it should be part of a national school curriculum.
Work with your partner:
It took us a long time, in our marriage to come to an arrangement where we saw eye to eye on finances. Coming from very different backgrounds and ideas on what to spend money on and what was important. I like to bag a bargain but will spend when I think something is worth being spent on, and the husband likes to analyse and work out our budget to very fine detail. We work together though and try to plan our finances. We have, like many people made mistakes, and both of us have paid off student loans and debt, but our life goal is to leave the UK when our children are adults and leave home and move somewhere where living costs are cheaper and the weather is better so we work towards that. We do also have to allow for the fact that university education in the UK is now no longer free, so that’s a major factor in our financial planning, as well. We currently rent our home, and don’t plan to buy a house in the UK, but would like to invest in a property abroad that we would eventually live in.
Free finance calculators:
So working towards those goals whilst managing what is an increasing cost of living, means we have to regularly look at what we spend and if we need to make changes. I am currently in the process of looking at starting my own business, and that’s a big step with a lot of planning and careful thought needed. We sit down every six weeks or so and look at how things are going and we often will use a free financial calculator to check if it’s worth us refinancing a loan, or applying for a credit card, or even looking at investing some money, or moving our savings somewhere with a better return. If we need serious and complicated input we will seek help from a financial advisor but most of the time it’s handy to just use a site that gives you the figures your need and some neutral information to help you decide what you need to do to make your money go further or save on credit costs.
Keep a budget and try and stick to it:
We also keep a running spreadsheet of what our monthly budget looks like. This helps us to know what we are spending and where the money goes (and if you have kids, you know it doesn’t seem to go far!!) and we adjust things accordingly. There are times in the year when we can loosen our financial belts and other times when we have to breathe in, and plan for spedning. Things like unexpected vet bills, and costs like car maintenance can’t be fully planned for but we have an “emergency credit card” with a low interest rate that is very useful for these things. ]
Price Comparison sites for bills:
Using price comparision websites is another trick I have learned works. I was always a bit skeptical about them, thinking they were money making scams but when our utility bills went up last witner, I decided enough was enough and spent an hour browsing a couple of price comparision sites and managed to swtich our supplioers and save us nearly £30 a month. That might not sound a lot but over a year it works out as a little bit less in our budget to spend.
Pensions and retirement are a bit of a hot topic right now, because I don’t work full time and therefore don’t contribute a lot to my personal pension fund. I think people live in a bit of deinial and hoep for the best around planning for when they stop work, but it you do need to think about it. I recenlty did an online consultation with a pension advisor and was shocked at how easy it is to actually contribute to my own pension, and also realised that I need to do soem tweaking to my own personal tax contriubitions to help with that.
Quality over bargains:
One of the things we took a long time to agree on was what was worth buying and what isn’t. We realised that sometimes it’s ok to bag a bargain, but sometimes cheap doesn’t always mean saving money. We made a mistake with a car we bought that ended up costing us a lot of money, in the longer term, even though it was cheap to buy. Sometimes spending a little more on soemthing means it will last you logner and you will get value for your money. That deosnt mean you have to break the bank but it can actualy save you some pennies.
Some people will argue that insurance is a con, and that life insurance, home insurance, pet insurnace is just a scam to make companies money. I would argue that if you don’t have insurnace and you get in a sticky spot, and need to cover some costs, then you might regret that. So we do pay for pet insurance, health insurance and home contents cover. It is a monthly cost (see above, compare and switch if it is costing more than you want to budget for) but when you are presented with a £1000 vet bill unexpectly you know that your insurance company will cover the majority of the cost and you won’t be having to scrabble to pay it off, and struggle, it’s a huge relief.
Most of these things are simple to set out and stick to, and if you work together, and communicate with each other, it helps. We have got much better at dealing with our family finances as we have learned, sometimes the hard way what works and what doesn’t. My best advice would be to plan, budget, and seek advice if you need it, and also don’t make big decisions about spending unless you are both on board.
The only thing we don’t agree on currently is where we want to retire to when our kids leave home and we have time and finances to spend on just us. We are working on that one though…