As a busy parent, it’s far too easy to forget to take your finances as seriously as perhaps you should do. Life is busy. You have children to attend to, a career to focus on, and a house to run. It’s easy to let things slide. Time is short and by the time you’re finally free, you’re most probably exhausted. However, it really is crucial that you take your family’s financial health seriously.
It’s far too easy to let daily life get in the way of putting steps in place to ensure that whatever happens, your family’s financial health is protected. It’s easy to get caught up in the craziness of everyday life – from work to chores there’s always something to think about – and let the important things, such as yours’ and your family’s financial health, slip through the cracks.
However, regardless of how hectic family life might be, it’s important to make sure that you take your finances seriously. This means taking the time to actually think about your finances and the protection that you have in place.
The good news is that when it comes to your family’s finances, and making sure that you have put the adequate safeguards in place, you don’t actually need all that much time to focus on your finances and put your financial health in order.
When it comes to protecting yours’ and your family’s financial future, it’s actually far easier than you would think to get things in order, it’s just a case of knowing what steps you need to take. Bearing that in mind, below is a guide to the essential steps that you should consider taking if you want to better protect your family’s finances.
Be a smart spender
If you’re lucky enough to have a disposable income, don’t make the mistake of feeling like you have to spend the entirety of it each month. Just because the funds are there to spend, that doesn’t necessarily mean that you have to spend them. While it’s nice to be in a position where you have funds to use to splash out and splurge on luxuries, you don’t have to continually spend. Instead, focus on becoming more of a smart spender – aka only spend what you actually need to.
It is all well and good picking up household essentials, such as a pack of new throw cushions for the sofa or a selection of new towels for the bathroom, if you need them. However, if you’re simply spending for the sake of spending, then it might be worthwhile taking the time to think more carefully about your spending habits, and whether you’re splurging when you should be saving.
Take the time to think carefully about your spending habits – do you feel that you’re spending too much? If, after careful consideration, you feel that you may be spending or the sake of spending, then it might be time to start thinking more carefully about your financial habits. Perhaps it could be a good idea to start setting a monthly budget that outlines the amount you should be spending each month, to help you cut back and reduce your outgoings? There are some incredible apps that can help to make learning to budget a little easier. Remember, budgeting doesn’t mean cutting out luxuries – it simply means having a monthly limit or luxuries so that you don’t end up overspending and wasting money.
Once you have begun to reduce your monthly spending, the next step is to think about how you can start saving money – that is, if you don’t already save. Or, if you already save money each month, how you can increase the amount that you are putting aside. This isn’t always a habit that it’s easy to get into – because when you have funds to spare, naturally you want to spend them. However, by saving them you are putting yours’ and your family’s financial health and financial future, first.
To make saving funds easier, consider opening a dedicated savings bank account. That way, you won’t see the funds in your normal bank account, and thus should be less compelled to spend them. Consider opening a high interest ISA, where you can place all of your savings each month, allowing them to grow quickly. If you are serious about saving and aren’t planning on dipping into the funds that you save, then an ISA could be a good option to consider. If you want to be able to move funds around as and when you need them, then a normal savings account could be a better option to consider.
When selecting a place to save your funds, consider using a bank that has a smartphone app, to help make the process of managing your funds simpler and easier. If you’re unsure which app to opt for, take the time to do some research – there are plenty of useful resources online that you can take advantage of.
Always have a backup plan
It is always a good idea to have a financial backup plan in place, so that whatever happens, you know that you and your family are covered. Of course, knowing how to create the perfect financial backup plan isn’t always easy, as there’s a lot that you need to think about. However, it is worth taking the time to think carefully about your backup plan, so that whatever happens, you know that you’re covered.
For instance, say you lose your job, you need to have a plan in place for situations like this in regards to how you would manage your finances. A good option to consider is to open a ‘rainy day’ savings account alongside your other savings account, that can be used should a negative financial situation occur. Ideally, you want this back account to have enough money in to cover your family’s finances for at least three months. This would give you enough time to get things back on track, should your financial health take a dip.
Have adequate insurance in place
If there’s one mistake that you don’t want to make when it comes to your finances, it’s failing to take the need for insurance seriously. Insurance is exactly that – insurance against many negative situations. When it comes to your financial health, insurance is a must-have investment. The question is, of course: what should you insure?
To start with, home and car insurance are both musts. It’s also vital that you look into health insurance for your entire family – the good news is that there are lots of cheap health insurance plans available to choose from, so ensuring your health doesn’t have to be overly expensive.
If you’re worried about a potential loss of earnings, you could also consider taking out income protection insurance. By taking out this type of insurance, you can make sure that should you lose work as a result of illness, for instance, that your income would be protected.
There’s no getting away from it, insurance is a crucial investment. If you want to put your family’s financial health first, you need to think carefully about the insurance that you have in place.
Teach your children about the value of money
While this might not seem like a key step to take, it really is. When it comes to protecting your family’s finances, it’s vital that you teach your children the value of money from a young age. This is because, the younger your children are when they learn about money, the more likely they are to grow up having a ‘healthy’ approach to finance. This means not constantly asking you for things, because they understand the value of money, therefore helping you to spend less and protect your own finances.
A simple way to teach your children about the value of money is to give them a weekly allowance and explain to them that they have to make it last for the entire week. If they want sweets, or a new toy, or to go out somewhere, they have to use their allowance for that. By giving your children money to budget, you will encourage them to better understand the value of money, instilling an understanding of the importance of financial value.
Save for your children from a young age
To help make your children’s teenage years a little more affordable – think learning to drive, wanting all of the coolest gadgets, and heading off to college – start saving for their future from a young age. This will help to ensure that as they get older, you have funds to dip into to cover the costs of these things.
Choose a bank and open a savings account for each of your children. Any funds that they get while growing up, put a percentage into their savings accounts. For instance, say they are gifted £100 for their birthday from family members, put 50% into their bank account for their future and let them spend the other 50%.
There you have it, a guide to the steps that you can opt to take to help protect your family’s finances.