It’s claimed that money causes
more problems in families and between partners than pretty much anything else.
If you’ve ever experienced the worry and stress of living through financial
difficulties, you’ll know what a serious effect it can have on your
relationship and your family’s wellbeing. If you
haven’t, then congratulations! However, it doesn’t mean you won’t face
your own financial challenges in the
future. Therefore, it’s sensible for every couple to take charge of their
finances and ensure the security of their family for the future.
Budgeting
Money management
starts with having a sound, accurate budget that you refer to regularly. If you
don’t have one in place, it only takes a couple of hours to set up and will
prove invaluable in keeping your spending under control. You’ll find many
different budget planner templates freely available on the internet, or you can
simply use your own spreadsheet to keep
track. The basic
requirements of your budget are to enter all your monthly outgoings, all
your monthly income, and thus have a balance figure at the end of each month.
Income is easy enough to add in, as for most people it will be their net
monthly salary. You should also include any other income from sources such as
benefits or investments to arrive at your total per month. Then you need to
calculate what you spend your money on, starting with fixed costs like
utilities, loans, mortgages, phone, and internet,
etc. and then calculating a reasonable
allowance for less predictable costs such as groceries and fuel. If you need some help working out what to
include and at what rate, there are helpful guides available that list the kind
of expenses you should be including and giving an average figure for typical
families.
Using your budget
Once you’ve
created your budget, you’ll have a much clearer idea of where your money is
going each month. That means you can look at where you might be spending more
than you want or need to, and make some economies. You should try and include a
regular amount for savings, and if
possible, a separate contingency fund to cover unexpected expenses. You also
want to have an amount put aside each month to cover treats, days out, or any
non-essential purchases that you wish to make. The amount you allocate will
depend on how much disposable income you have available, but even if that’s
very little, it’s a good idea to have a budget for spending money. You’ll find
it almost impossible, and quite depressing, to be unable to spend at least a
few dollars on yourself throughout the month, so don’t think of it as an
indulgence, but a necessity. You should refer to your budget regularly, and
update it to make sure it is accurate and you are sticking to the plan.
Savings and investments
Having a savings
account is always a sensible policy, but interest rates have been very low for
some time now, so low-risk investments are also a viable option. Be careful
with investments and avoid the get rich quick schemes that promise overnight
wealth, as these are bound to be either a scam or too high risk. Using your
savings to add to your capital by investing is a perfectly reasonable course of
action, but only if you are not putting your initial investment at undue risk.
Why you should consider insurance
It can sometimes
feel as though you are throwing money down the drain paying for insurance because if you never have to claim,
the money you’ve spent is gone and irretrievable. However, the point of
insurance is to ensure you have the means to cover large expenses that could
prove devastating to your financial situation if you can’t cover them. House
insurance is a good example. If your house is insured and it goes up in flames,
your insurance should cover repair or rebuilding, the value of your belongings,
and accommodation during the rebuild. If you had to find that money yourself, it could run into hundreds of
thousands of dollars, which is not going to be easy to find! Life insurance is
slightly different, as you will get a return on your investment. It’s a great
way of securing your family’s financial future should anything happen to you,
and avoiding the additional stress of potentially losing the family home. You
can now buy life
insurance online, using expert brokers who can advise you on the most
suitable policy.
The importance of making a will
It’s not a very
pleasant thought, having to plan for what will happen after you’ve gone.
However, it’s the only way you’ll be able to ensure that your assets go to the
right people. Do it yourself wills may be cheap, but wouldn’t have the same
weight as a will drawn up by an attorney, so it’s worth spending a bit more and
having the reassurance of knowing your wishes will be honored. A qualified attorney
will also be able to advise on the best way of wording your bequests so that
there is clarity regarding your
exact wishes.
Teaching your kids how to manage money
Teaching your
kids the ins and outs of creating a budget and handling their money is a
valuable gift that will serve them well as they
grow up. Many kids have little understanding of finances and monetary
responsibilities, and frequently encounter problems when they leave home as
they have no experience in managing their money. It’s never too early to start
with your kids, teaching them the value of coins and notes and showing them how
long they would need to work to pay for a new toy or another treat. The more understanding they have of money
management, the better they will be able to cope when they leave home.
Even if you have
a low income, you can manage your money far more efficiently using a detailed
personal budget. It will give you insight into your spending and where you can
make savings, and you will have control of your family finances, making it more
likely that you’ll be able to save for the future.
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