I think it’s safe to say we’re all feeling the pinch a bit at the moment when it comes to our family finances. The cost of everything seems to still be going up and up, and it can start to feel like things are out of your control. Especially if you don’t have a budget in place or a plan for your money when it comes in each month.
It can be tempting to stick your head in the sand and hope things fall into place, but the best thing to do to take back control is sit down and take a good look at your family finances.
Once you know how much money you have coming in and going out each month you can work out a budget, see if there are things you can cut back on to reduce your outgoings, and set up a plan for the future.
One model that’s nice and simple to use, but can have a real impact on your finances, is the 50-30-20 model. This is where you take your monthly income and put 50% of it towards your ‘needs’, 30% towards your ‘wants’, and 20% to paying off debt or building up a savings pot.
So the biggest chunk of your money goes to things like your rent or mortgage, household bills, food shopping, and travel costs. Then you can allocate another 30% of your money to things that you can get by without but you like to have, so things like your Netflix subscription, a new outfit, or a takeaway.
Finally you use that last 20% of your income to chip away at any debts you might have, or to put in a savings account.
You can read a bit more about this particular budget model in this article from MoneyPlus, where they really break down how it works in theory as well as giving practical advice on how you can apply it to your situation.
What I like about this particular model is that it allows for things like Netflix and treats, while still helping you pay down debt or build a savings pot. You just may need to adapt it to suit your particular set of circumstances, as well as seeing where you can reduce your outgoings and potentially get more money coming in.
While you can’t change the cost of most of your essential bills, there are ways you can possibly bring your other costs down. Take your food shopping, for example. While prices have been going crazy over the last year you could still try making changes like buying own brand products instead of the big brands, taking advantage of special offers on things you regularly buy, and looking out for reduced items that you can stash in the freezer.
The main thing though, is to take a good, close look at your family’s finances and put a solid, workable plan in place so you feel in control and know exactly where your money is going each month. And the 50-30-20 model is a great, simple option to get you started.
Disclosure: this is a collaborative post