How to Manage Family Finances

This is a collaborative post

Managing your own finances can be tough, especially during the current cost of living crisis. However, things will become even more difficult if you have a family, as you’re no longer just looking out for yourself.

Indeed, once you have children, it’s common to experience a drop in income and an increase in financial worries. If you’re dealing with this right now, here are a few ways you can reduce this stress and get your family’s finances back on track.

Build up your emergency savings

It’s always a good idea to have an emergency fund for unexpected expenses or a sudden loss of employment, but once you have a family, these savings will be even more crucial. Since you now have others to support, it’s vital that you have enough savings to cover your expenses for 3-6 months, just in case you encounter unfortunate circumstances.

However, don’t forget about your long-term savings goals too. Having an emergency fund is a priority, but other savings such as retirement savings should still be kept in mind. If you’ve been neglecting your pension, visit the Wealthify website to learn more about private pensions, investments and how to do a pension transfer to consolidate old workplace pensions. Start saving now to avoid retirement issues in the future!

Decide how to manage joint finances

If you’re married or in a long-term relationship, it’s important to discuss how you manage your joint finances, especially if you have a mortgage or children together. Many couples decide to pool their resources together in a joint bank account to cover all necessary expenses and then pay for other items separately, whereas some couples may prefer to keep their finances more separate. If you do decide to have more separate finances, make sure you’re both aware of all the expenses that need to be covered and perhaps discuss purchases together when they exceed a certain amount. This will help you be on the same page.

Write a family budget

You can’t keep on top of your finances if you don’t know what’s going in and out of your bank account each month. If you want to take control of your family’s financial situation, you need to track your spending and set a budget that’s appropriate for your current circumstances. Setting this budget will help you spot problem areas of your spending, enabling you to cut down on unnecessary purchases (e.g. takeaways or excessive shopping) if you need to save more money.

Look into government support

If you’ve cut out all unnecessary spending from your budget but you still can’t make ends meet, then it’s time to look for additional support to help you out. Make sure you’re taking advantage of all the government schemes you’re eligible for, such as income support, child benefit payments and child tax credits. You should also look into programmes such as the Healthy Start scheme to reduce your food bill.

Looking after your family financially is certainly challenging, but there are many tips and tricks to help you get by. Remember to prioritise your savings and always ask for help if you need it!