In many households, couples sit down together each month to talk about money and what needs to be spent. If you have teenage children or other adults in the house, involve them too.
It’s never too early to start teaching young people about managing money, and it’s good for everyone to appreciate how it much it costs to keep clothes in the cupboard, food on the table and electricity and water available. Give teenagers an allowance and some choice in how they spend it; that way they’ll soon learn important lessons about handling money.
See where you can cut down. In every household, there is some waste. Take it a challenge to see how you can cut down on monthly expenses and out savings towards something special for the whole family – an entertainment centre, big screen TV or a holiday.
Get the whole family involved and keep a record of your progress at the monthly budget meeting. For instance, if older children take turns to cook a meal once a week, you’ll find that you don’t spend as much on fast food and takeaways when no one has thought of what’s for supper.
In South Africa, things like health care and education are going to cost more and more. Make sure you plan for the future, making sensible provision for educating the children, coping with illness and your old age. The most typical way of doing this is to invest in various policies and annuities but, once again, make sure you can afford the payments. Many thousands of South Africans lose money they can’t afford when they cancel policies before they mature.
Learn to budget for the unexpected. One of the benefits of keeping financial records is that you can see how much you spent the previous year, which helps you to plan ahead. Check out Wonga’s budgeting guide here for some help. At the beginning of the year make allowance for things like car maintenance, household repairs and for other unexpected spending. Decide on a yearly amount and then divide by 12 to get the amount you need to put away each month. If the money isn’t needed it’s a bonus for the family savings fund!
These days it’s almost impossible to buy for cash, and good retailers offer attractive financial plans for all the furniture and other goods you need to make your life comfortable. Budget for your hire purchase items as you would for any other expense. At the beginning of the year, decide which items you need for your home – a new washing machine, TV or lounge suite – and plan which month you can afford to buy them in.
Every family should save, no matter how small the amount. In your peak earning years, between 30 and 45 years of age, you should save the most, but that’s when children and setting up home drain money away like bath water. In the end, it’s up to you and your family to decide together – do you choose a flashy new car or long-term financial security?
To learn more about how budgeting can be made effective as well as enjoyable for you and your whole family, I recommend checking out this forbes article, this will help you will learn the valuable steps to setting up your budget plan and sticking to it like glue.