Being financially healthy means feeling safe within your financial situation; something that we all strive for, particularly when you have a young family to consider. This could involve having a backup plan in case of emergency, money left over once all expenses are paid and ideally a cushion of savings. What with the rising costs of living, expense of raising a family and possibility of debt to take into account, financial health might seem to some like an impossibility – but it can be achieved. All it takes is a shift in attitude, the want to change and the motivation to stay committed to your families best financial interest. Let’s look at a few ways you can start today to improve the health of your financial situation today.
Look at your relationship with money
Are you sensible with money and stick to a weekly budget, or, if you’re being honest, do you find yourself living outside of your means unnecessarily? Do you have debt yet continue to add to it with unnecessary purchases? In order to change your financial health the first thing you must do is look at your relationship with money. It isn’t always easy, but it’s something which must be addressed if you want to see change in 2017. While we all want the best for our children, sometimes want can be confused with need. Take a month to record your family’s expenditure, then look at where your money is being spent. Is it that you’re struggling to make ends meet, and so need to look at how to bring in some additional income, or is it that you’re spending too much on socialising or unnecessary ‘treats’ within the weekly food shop? Even seemingly trivial things can add up and seriously affect your financial health. Be realistic with and identify your necessities as a family, and then work out how much you have leftover to spend on things like new clothes and socialising.
As we’ve already looked at, saving can be hugely beneficial for you and your family’s financial health. It can be a nest egg to upsize to a larger property if you find yourself outgrowing your current home, something to secure your children’s financial future, be a saviour when faced with an unplanned expense or simply act as peace of mind. While we all have the best intentions with savings, as they’re not looked at as a necessity it often becomes something that falls to the wayside each month. In order to save you must prioritise it. Budget a realistic amount you can afford to put aside, and then at the beginning of each month transfer it directly into your family’s savings account before it can be spent. If you really want to improve your family’s financial health then this is the year to get serious about saving. Next time you think about making that unnecessary purchase, put the cost of it in your saving account. It could be simple as not renewing that unused gym membership and allocating that money to saving instead. Ensure to do your research and choose a bank account that is designed for savings and will offer you the best return. These can accumulate interest with the added bonus of not allowing you to withdraw (unless in a worst case scenario). Try to get the whole family involved and install a saving mindset by encouraging your children to save money from their pocket money. This is an ideal way to feel financially safe and secure because you can safe in the knowledge that regardless of what life throws at you, you have the insurance of money put aside.
Consider supplementing your income
If you’re finding it particularly hard to make ends meet, then consider if there’s any way that you could be supplementing your family’s income. While it’s not always possible, particularly if you have your hands full with full time child care, it’s worth considering whether there’s any space in your week that you could be utilising to earn some additional income. If you’re a stay at home mum do you have the time or space outside of existing commitments to take on part time or flexible work? Regardless of whether you’re in full time work, part time work or full time mummy could you use your experience to go freelance? Even something as simple as having that long overdue clear out and selling secondhand items on sites such as Ebay can really help to bring in a little extra cash that can be put towards making the demand of month to month living expenses a little easier.
If your family is in a position to do so, consider making some investments. If it’s more your long term financial health you’re wanting to secure investing can be a great way to do this, as – if approached correctly – it allows you to grow an initially small amount of money or savings into something more substantial. This might be in the hopes of a reliable retirement fund, or to help contribute towards your children’s education or first home. A popular choice of investment is property, as it enables an additional monthly income should you choose to lease it, leaving you with an asset you can then sell (hopefully for a better price) later down the line. Financial advisors will manage your investments for you, or for those more financially minded, you can make investments in companies and shares using online platforms such as CMC Markets. However, be sure that your family is in a position to do so (as well as to, worst case scenario, stomach any losses) before considering investment, as there is a degree of risk involved. Never invest more than you can afford to lose, and always start small. If in doubt consider seeking advice from an independant financial advisor who will be able to assess your financial situation and provide guidance on the right type of investment for you.
Being financially healthy isn’t always easy, and unfortunately, it’s not always fun either. Depending on your financial goals (or the urgency of your situation) it can be worth committing as a family to a duration of time where you strip back to the absolute basics. Things like unnecessary purchases, that costly Sky subscriptions and weekly take aways should be reevaluated and ideally avoided – at least for the duration of your ‘strip back’. If you’re overrun with clothes, make a rule than no new clothing is to be bought. Similarly, if you go frequently go out as a family you might look to cutting back eating out to once a fortnight, making more of an effort to make mealtimes a chance to connect as a family. Depending on your motivations, it can be as little as three months or as long as a year, and you have the control to decide by how much you cut back. This can be confusing for children if they’re used to life a certain way, but use it as an opportunity to teach them about the importance of budgeting and being mindful with money. Any money that is saved during your strip back can be put into a savings account.
Make this year better
By addressing your relationship with money and combining it with either savings, investments or cut backs, you can seriously change you and your family’s financial situation for the better. Through making more mindful decisions around money and considering every penny that you spend you will see your bank account change entirely. Much like with our physical health, financial health isn’t something that can be changed overnight, but instead requires implementing small changes and possessing the determination and dedication to meet your financial goals.