How Do I Improve my Family Finances?
Many Canadians say “I want to improve my family finances,” but their actions don’t reflect that. Much of the time, it’s because these individuals lack the knowledge they need to unsuccessful. Would you like your family to be in better shape financially speaking? Most people readily admit that there is room for improvement when it comes to family finances. The problem is that when you are living paycheque to paycheque or when you are struggling to pay off debt, it can be difficult to identify solutions to make those improvements.
“With the rising cost of living, raising a family is expensive. In order to keep your household finances on track, you need to have a plan and constantly be looking for ways to get ahead, financially speaking,” says Jeff Schwartz, executive director, Consolidated Credit Counseling Services of Canada.
There is no time like the present to improve your family’s financial situation. One of your greatest expenses may be the debt that you are carrying. Can you imagine the freedom that you’d have if you got rid of your debt? We can help. Call one of our trained credit counsellors at 1-844-402-3073 or check out our free online debt analysis.
If you’ve ever claimed “I want to improve my family finances,” below are some ways you can go about doing it.
Learn about budgeting
Take inventory of all your financial accounts, debts, and interest rates. If you don’t already have a household budget, this is where you need to start. Create a comprehensive monthly budget that outlines all of your necessary expenses against your income. Make sure that you track your income and expenses each month to gauge your progress and accuracy of your budget. Doing this can give you a clear look at how you can achieve your financial goals over time.
It is much easier to accomplish things if you set goals. Specifically, you need to set goals and determine a strategy to get there. Set simultaneous goals for the short and long term. You can do both at once! In addition, it helps you to curb your spending habits when you have specific goals in mind.
Examples of some of your personal finance goals could include:
- Buying a house
- paying off a student loan
- Establishing an emergency fund
When you spend money with intention, nothing goes to waste. Start saving more than you spend on small, short term pleasures. You’ll be happier in the long run.
Pay down debt
When you are in the store, ready to make a purchase, would you still buy it if the item was considerably more expensive than you thought? That is basically what is happening when you let debt continue to accumulate interest. You literally pay more than the price tag at the time of purchase. Pay down debt to free up your cash flow and to avoid the stress that debt puts on a family.
Don’t forget retirement and education
Even though it may seem like your retirement and/or your child’s post-secondary education are a long way off, you are well served to begin saving sooner rather than later. In both instances, you want to do everything you can to avoid accumulating debt during these life stages, and that is accomplished with savings.
Become a planner
“A lot of successful money management comes from adopting good habits. One excellent habit that will vastly improve your family’s finances is to become a planner. This includes planning ahead for your spending, but also planning ahead for things like your meals, energy consumption at home, and even when and where you intend to fill up your car,” says Schwartz.
Engaging in impulse spending means that you are very possibly spending more than you should for certain items. Don’t forget that convenience almost always comes with a premium attached that can really strain your household budget.
A spending plan goes hand in hand with personal budgeting and future financial planning.
Talk about money at home more frequently
Don’t let money become a taboo subject in your home (as in you only discuss it when it is a source of stress). Make a point of discussing money regularly with your spouse in a positive environment, where you can share your points of view and progress towards your goals.
It’s all about opening up the lines of communication with your spouse and teaching your kids that communicating about money is an important part of good money management within a family.
Subscribe to the “save now, spend later” philosophy
Another habit that you should embrace is that of patience. Don’t fall for the buy-now-pay-later philosophy that so often comes with accumulating debt. Rather, start deferring purchases until you have the cash in hand and you can afford them based on your budgetary allocations.
Get all the financial help that you can get
It can help your household budget go further if you can increase your revenue. That doesn’t necessarily mean that you need to go out and get a part-time job (although that helps for sure!). Make sure that you are taking advantage of all available tax credits, subsidies and other financial assistance that you are eligible for. Be proactive and research Federal, Provincial and Municipal opportunities.
Recognize the importance of saving
What would you do in the event of an emergency? Do you have any savings to rely on to cover unexpected expenses or repairs? How would you cover your monthly costs if there was an interruption or reduction in your monthly income?
Get in the habit of including savings every month to avoid having to turn to credit to cover these costs. Do it automatically (i.e. through your employer or through your financial institution to make it a habit you can stick to over the long term).
It is essential to make sure that your family is properly insured. Look at health, life, auto and home/tenants insurance to make sure that you’ve covered all of your bases. Check out what your employer offers and then top up the rest, as needed. Look at ways of reducing your insurance costs (i.e. bundling, home improvements to reduce costs, etc.)
Commit to financial literacy as a family
Encourage your children to learn about financial concepts. These are life lessons that will set them up for success in the future. You can learn about things like saving, credit, how credit cards work and basic investing together as a family.
Also, engage your kids to learn about money at an age-appropriate level. Play money games so that they can begin to learn about how to handle money well. With older kids, get them involved around the house and give them an allowance. They can translate the concept of hours worked for money earned.
If you’re ready to make “I want to improve my family finances” more than a dream, we can help. Let’s get started. Get in touch with one of our trained credit counsellors at 1-844-402-3073 or check out our free online debt analysis today.