Even though the economic problems are starting to come to an end, the cost of living is higher than most salaries. This can be difficult for many families who have a lot of payments that they need to make. They struggle to stretch their pay far enough and be able to have fun together. You can take more control over your family finances and here are five tips to help do that.
1. Only Let One Person be in Control: When it comes to the finances, have all the accounts controlled by one member of the household. This helps to create a budget and know where the money is going and when. Each person should have an allowance – yes, even adults – and then the person controlling the finances can set up direct debits and make sure all the household bills are paid. There is no need to worry about finding out where some money has gone when it was needed for a bill.
2. Set up a Budget: Budgets are the best way to track the money going in and out. You know how much is spent on household items, including your mortgage or rent and the bills, and will know the amount you have left over. That one person controlling the finances will need to set up a realistic budget that covers all the outgoings and makes sure there is money for covering debts, putting into savings and allow for something fun. It takes time to implement but will be a lifesaver to avoid payday loans and other forms of debt.
3. Clear Your Debts Now: While mortgages, student loans and other similar forms of debt are considered good, no debt is really any good. You want to get out of it as soon as you can, especially when it comes to payday loans, overdraft, credit cards and anything else with high interest rates. Would you rather pay the minimum and start saving? Think again! The interest on your debts will be much higher than the amount you save so clear them first. Take control by tackling one form of debt at a time to clear that and then work on the next. This avoids overstretching your funds and you will start to see the light at the end of the tunnel.
4. Plan Ahead with Your Meals: Food bills are increasing for all families. The best thing you can do is plan ahead with your meals and control the amount you spend. This will not only help your bank balance but it will also help your waist line! You will only buy the items that you need instead of spending money on sweet treats and candy for the family. Of course, allow yourself a treat now and then but only when your finances allow. Plan your meals so you can take a packed lunch to work or school instead of spending more money!
5. Set Up a Bill System: If you don’t pay your bills on time, you run the risk of a late payment penalty. If you pay them early, you run the risk of not having enough money for something else. Set up a system so that you pay your bills a day or two when they are due and then mark them off when they have been paid. This requires organization, which is why having one person control your finances is best.
Take control of your family’s finances. It doesn’t need to be difficult and requires a little organization. You will soon find yourself out of debt and living comfortably. There will be no need to rely on payday loans or get into other forms of debt just to make the payment for the electricity bill.
Clarence Evans is a financial analyst who works with a company providing support systems for various firms. He studies everything, from financial conferences, e-learning activities about finance, or even the twitter feeds of knowledgeable finance point persons such as Reza Bundy. Follow him on Twitter @ClarenceMEvans