Take the pain out of managing your family’s finances.
Large families these days are often the exception rather than the rule. But having said that, I do have a few friends who have decided that their families weren’t complete without four or more!
Taking care of household finances can be taxing for any family, but especially so if you have a large brood. With proper planning and budgeting tho, there’s no need to stress!
Here are some tips to help you effectively manage your family finances.
1. Give them the once over
Sitting down as parents first and figuring out how much money is coming in and going out may help you gauge the state of your family’s finances. A clear picture of your household income and expenses could set you up to manage your cash flow better. It’s vital to know your numbers and figuring out what your minimum cost to live is, is vital!
Then, depending on the age of your kids, include them in a family discussion about what it takes to make ends meet. This doesn’t mean you need to burden them with your ‘we’re broke stories’ but can be great training in their financial literacy journey about what’s involved in running a household.
2. Rein in the spending
Keeping expenses under control can be rather tough in a large household. But if you’re spending as much or more than you’re earning, you might want to consider limiting your family’s discretionary costs by buying only what you can afford. This might mean curbing some extra-curricular activities or eating out.
Ask the kids for suggestions on what they’d like to do in place of other paid activities. Maybe games days, puzzles, hiking, riding or picnics can substitute for movies and theme parks. They might even surprise you with their ideas!
3. Set financial goals
Setting financial goals as a family may help you work towards future aspirations instead of simply meeting current expenses. Whether it’s buying a bigger house or going on a dream holiday, having a financial goal may help your family set priorities and stay on track financially. It also provides a common goal for everyone to work towards.
4. Keep a budget
Keeping track of spending may help you to better manage your family’s finances. By working with a professional financial adviser, you could create a budget that factors in not only income and expenses, but also your financial obligations. Some advisers may recommend an App that you can keep handy on your phone to track things daily if needed!
5. Build up emergency and retirement funds
Unplanned expenses such as medical bills and replacing that poor burnt out washing machine, can put a dent in family finances. But, by growing your emergency fund to cover six months’ worth of expenses, you may be better positioned to handle unexpected events.
While it’s easy to neglect your own financial future when providing for your family, saving for retirement should not take second place. Keep in mind that the earlier you start saving, the better chance you have to grow a sufficient nest egg.
Working with an adviser
Managing finances for a big family need not be a painful exercise. By working alongside a financial adviser to keep track of your spending, and discussing money matters and setting financial goals as a family, handling household finances is a task you can achieve.