Five tips for family financial fitness
If you want to be a financially fit family, there’s no need to go to the boot camp extreme. In the same way a great diet is a must for a healthy body, financial fitness can start with what you eat.
Not wasting food and planning meals can help you slash your household expenditure, says Kathryn Carmont, who runs cooking blog ThermoHub.
“Meal planning saves my family so much money. By knowing what we are eating, we use up ingredients that need to be cooked first and only buy what we need,” she says.
Food is usually a major part of any household’s expenses and there are lots of other ways to cut your food bill. For instance, shopping at places like Aldi and Costco can really help lower your food bill. Looking for specials is another idea.
But it’s also important to review your spending and saving in every area of your life to ensure your family is financially fit.
Natalie Perrin runs the Australian government-funded parenting web site raisingchildren.net.au, which attracts more than 40,000 visits a day.
Perrin says good money management starts with putting together a weekly, monthly and annual picture of what you need to spend and what you have left over.
She has five great tips for managing money and avoiding debt.
- Follow the basic rule – never spend more than you earn
“If you decide what your priorities are, it will be easier to control spending in the different areas of your family life,” says Perrin.
“Focus on what’s best for your family rather than trying to consider every financial option out there.”
- Develop a plan
If you’re worried about how to balance your family budget, try developing a basic plan for managing your money.
“Consider using an online budget planner,” Perrin says.
- Keep track of what you spend
“One of the hardest things about making a budget and managing money can be keeping track of what you spend,” says Perrin.
So to keep track of your expenses, look back over your online statements to track what you spend over time.
- Get your debt down
If you have a number of credit cards and personal loans, it’s an idea to consolidate them into one loan and shop around for the lowest interest rate possible.
- Think through your saving
You can’t reach a goal unless you make one. So decide what you’d like to save for and make a plan to reach that goal.
“Give yourself plenty of time to reach your goal because saving can seem to take forever,” says Perrin.
After considering how long it will take to reach the goals you’ve set, add a buffer so you’re not disappointed if it takes longer to hit your target than it should.
“Be realistic and you’ll avoid feeling pressure,” she adds.
Saving will have an effect on your quality of life – no more endless lattes and nights out. So think through the real ramifications of setting a saving goal on your life. If you’re being too ambitious, pull back a bit or give yourself a little more time. That way you will be more likely to stick to your plan.
There are lots of ways to boost your nest egg and reduce your debt. The idea is to constantly look for ways to add to your savings and reward yourself when you hit milestones along the way.
Says Perrin: “Making a simple savings plan means that you’ll be more likely to reach your goal of spending less than you earn, which adds up to saving money.