When you have a clear idea on where your money is supposed to go, it’s a lot easier to manage. But when your responsibilities are piled up, it can be overwhelming. What you need is a clear financial plan to help you organise your money and allocate funds to the correct channels.
Creating a financial plan for your family is simple, and you can do it yourself. Prioritisation is the key to get your plans off the ground. But there are other things you need to do to make it more effective. Here are some ways you can get started on your family’s financial plan:
The first thing is to be clear on your goals. What are you looking to achieve? Pay off debt? Start a uni fund for your kids? A holiday with your family? Or maybe even a down payment for car finance?
It’s important to set goals because it serves as your motivation to follow your financial plan and it doesn’t feel like a chore.
Now that you have a goal in mind, the next step is to create a list of your living expenses. For utilities, make a rough estimate on the average amount you pay monthly. You can also list down other expenses like morning coffee, and items for your hobby.
By listing down your costs, this gives you a better idea on where your paycheck goes and if they are worth it. This makes the next step a lot easier:
It’s now time to make decisions. With your list of expenses, decide which ones to keep, take out, and reduce.
Think about each item and think if it’s a necessary expense. Utilities and rent? Keep them. Are you eating out more than once a week? Take it out, hobbies? Reduce the money allocated.
When you remove certain expenses out of your budget, you free up money that can go towards your goal.
Of course, splurging once in a while is okay. You can treat your family to dinner outside, or buy something nice for yourself. But don’t forget to follow the financial plan you created for yourself.
Now that you have freed up some of your money put it towards your goals. Over time, doing this becomes natural.
What’s more, continuing to follow a financial plan will pave the way to a better life for everyone in the long run. This is especially true if you are currently paying debts and rebuilding your credit.
Nothing comes easy at first, especially following a financial plan. That’s why it’s important to go hard at it for the first few months and give yourself a break every once in a while.
So, get started with a financial plan today and take the first step towards a new life.