Many families don’t manage to control their expenditure. As a result, they end up paying interest rates on credit cards and debts instead of putting money aside.
The key thing here is not to become mean with money, but to learn how to spend it wisely and purposefully.
In this article, we’ll share some practical financial tips on how to improve family budgeting and avoid a debt spiral.
Table of Contents
1) Pay all bills on time
Paying all family monthly costs on time means knowing how much money you have at disposal at every single moment.
Families that pay their bills online are even more likely to properly organize their monthly finances. As you receive your bill, you go to your e-banking account and pay the required sum. If you receive those bills in electronic form, the payment procedure is even simpler.
If you pay every bill on time, you don’t need to pay interest rates on late bill payments. Also, you avoid the chaos of late payments. People who don’t know how many bills they’ve paid are usually chaotic with other payments, as well.
By bills here, we don’t only refer to overhead costs, but to all family monthly payments. From monthly mortgage and car loan installments to various children’s memberships, stay disciplined with all your payments and you’ll improve your family financial management in the long run.
2) Shop around for clothes discounts
An average American family spends about $1700 on clothes annually. It doesn’t sound too much, but this is only an average sum, which means that many US families spend between $2000-3000 per year. Depending on your income, you should plan how much money you can spend per month on clothes and other accessories.
For starters, it would be wise to shop around to find online discounts for clothes. Even if you don’t prefer buying clothes on the Web, you should compare the prices and deals that way to see what brick-and-mortar stores to visit.
This is especially practical for families with two or more kids. Shops often offer various clothes packages for kids or free pieces of you buy several items.
By doing so, parents can save a lot of money and buy great clothes for their clothes at the same time.
3) Plan your meals and food shopping
If you make a lot of money, you probably spend a lot of food, as well. High-income families often eat in restaurants. The stats published by the US Department of Agriculture show that 20% of the richest US families spend about $13,900 on food in 2019. The same source claims that 20% of the poorest US families spent about $4400 on food in the same period.
Logically, families with low income need to plan their meals and how much food they buy. Families with average salaries should also think about the food they buy and meals they prepare, but they can relax from time to time.
Using a weekly template for daily meals will help you stay frugal when buying food and keep preparing healthy food for the entire family.
Additional takeaway: all family members should express their eating preferences so that parents know what food to buy and cook. What’s more, both parents should prepare food. They’ll set a good example to their kids and they’ll have fun doing things together.
4) Open savings accounts
Smart financial planning must include saving money.
In line with that, families that want to make a step forward in financial planning should put a certain amount of money aside every month.
The first reaction of many parents to this statement is that they can’t save anything. This simply isn’t true. If you apply the tips from above, sooner or later you’ll find some extra money in your pocket.
You don’t have to save thousands of dollars every month. Sometimes $50 per family member is all right. The point is that both parents and their kids develop the habit of saving money. Once you learn this skill, it stays with your for good.
In that light, parents should open a savings account for each family member. When they receive their salaries, pay the bills, and plan how much money they’ll spend on food and clothes, they can put aside a certain amount of money for each family member. Saving for kids’ education is also a wise thing to do. On the other hand, parents can save money for vacations, retirement, or any other purpose.
5) Find affordable childcare service
Both parents need to work in most middle- and low-class families to make ends meet. This means that those parents need to have someone look after their kids while they’re at work.
Parents usually have the following childcare options at their disposal:
- Nurseries and kindergartens. State-owned and private childcare institutions are a reasonable choice for working parents. Public nurseries and kindergartens are normally less expensive, but the private ones usually pay more attention to kids’ individual characteristics.
- Professional governesses and nannies. If parents do part-time jobs, they can hire individual childcare professionals to take care of their kids. This is where professional governesses and nannies come on stage. Parents should opt for certified childcare experts that offer a certain syllabus and activity plan that they’ll implement with their kids. Many helicopter parents control their kids too much, so it will be beneficial for both kids and parents to work with third parties to add to children’s upbringing.
- Grandparents. If grandparents don’t live too far away, they should look after their grandchildren from time to time. A combination of childcare provided by professionals and grandparents could be a winning combo. That way, children would get enough structure and emotions while their parents are at work.
It’s difficult for an average family to go through the month without financial planning. The first thing is to get out of debt and fill all the budget holes. Apart from that, don’t throw away food but plan your meals and buy affordable clothes. These routines will lower your expenditure and make some room for savings. Finally, ensure quality childcare for your kids while you’re at work to ensure that they receive proper education and get ready for the future.