A mom’s 5 tips to handle family finances effectively

Handling one’s finances effectively should be put out there as one of life’s earnest goals, much like graduating from college. Why so? Because the knowledge and management of our finances has much bearing on our happiness in both the present and future. It will decide whether we sleep on the street or in a comfy home, stay single or married, enjoy life or stay strapped in a jail called çredit card debt.

I first had my encounter with personal finance at the age of 18 when I lived away from my mom. The experience of paying the monthly rent on my room and shopping for groceries prepared me for decision-making and independence at an early age. I wasn’t really conscious of my spending at this time. I was fortunate to have a job before graduating from college, but as a young woman, I spent it on clothes,bags and eating out. I definitely had the vaguest idea of planning for the future then!

The idea of budgeting only came when I had a family and raised kids. Having one child can have such an impact and having four kids (as I have) was something MAJOR. Am lucky to have acquired assets, such as a car and real estate, through my former job with government. I didn’t have to be in debt and pay high bank interest for these things. As with any parent, the hardest part was paying for kids’ private school education. Not only were there tuition fees, but also allowances plus miscellaneous expenses like books, uniforms and tutoring.

Having an experience of handling family finances for decades as a mom of four, I can recommend seven principles or pieces of advice which we need to apply in our daily life for optimal success:

1. PREPARING A BUDGET AND STICKING TO IT. Have you ever met a person who wrote down each and every expense they had for the day? I have friends who do this, and am not the type, lol. However, drawing up a budget is indeed wise to track one’s spending for the month or you might spend it all on online shopping. Some of the most important elements in a household budget include housing, education, car & gasoline, groceries, electricity, household help. For those who can afford it, it is wise to put aside 10% (or any extra %) of the earned income towards savings for the future. Because we can never predict when ‘rainy days'(a.k.a. family emergencies) will come. Thankfully, there are now mobile apps these days which will make the time-consuming process of budgeting a convenient and automatic one.
2. DRAW UP A PLAN TO ELIMINATE DEBT. Most people’s weakness these days is to keep up with the Joneses, thanks to social media. Because of the prevalence of online shopping and food delivery , a lot of peeps are also tempted to charge everything to their credit card. The question is, do we really need all these things we are buying? All the small purchases when multiplied together can definitely add up. The truth is, we should be making a grand plan to remove debt from our life instead of piling up more. The best thing is to add a dedicated column for debt in the household budget to keep track and make sure that all obligations are paid on time. Click here to learn more about a debt consolidation service which will handle all debt repayments in one place.
3. SET ASIDE FUNDS FOR EMERGENCIES. The pandemic has taught us about savings as people got sick or lost their jobs and shut down their businesses. Only the wealthy or those prepared can truly say they are coming out of these challenging times unscathed. The experts recommend building a nest egg of at least six months of one’s income, but for greater peace of mind, the more savings…the better!
4. INVEST CONSISTENTLY & WISELY. Investment is not just about putting money in wealth-building portfolios but also thinking twice before making a big purchase. Should you really buy that house on XX interest and if so, what will be the impact on the family’s finances? Is a new car really needed or can you do with a well-maintained old car? When investing, it’s best to think long-term so a retirement or pension plan is a good option for parents.
5. TEACH KIDS THE VALUE OF MONEY. The truth is: whatever the parents financial decisions are directly impact on their children. A mother or father can influence their kids more on financial management than school or their friends. So simple acts like letting the son or daughter budget their allowance or do paid tasks to learn the value of money can go a long way. Parents must teach by example and teach frugality instead of needless spending.