It can be challenging enough to deal with the finances even without children. Once you throw kids into the mix with schools, after-school clubs, feeding them and everything else, the last thing we want to do at the end of the day is sit down and look at our finances.
The good news is that keeping on top of your money doesn’t need to be too time-consuming. There are always ways to ensure you are doing the basics. Below are my top five tips to help busy parents keep on top of their money.
This may be the one time-consuming element initially depending on the state of your finances but it’s an essential step you need to take financial control. Find out what you own and owe, how much your income is and what you spend. Sort out the paperwork, get rid of what you don’t need and look to see if there is any way of simplifying your financial affairs.
Once you are organised it will make your money much easier to look after moving forward. With this information, you can create a simple spending plan which will keep you in control without having to monitor it daily.
Your financial plan doesn’t need to be complex. Create a simple one-pager including the following:
There are lots of apps to help you track your spending and for better budgeting. However, it still involves going into these and reviewing the data. Tracking your spending can be very helpful but if you are like me, I would rather have a system in place so I don’t have to keep tabs on it.
Implementing the right structure with your accounts means you can keep an eye on spending without having to worry about every penny. You can break your spending into three main areas:
I have a main bank account where income is paid into. My fixed expenses also go from this account. Then I have a weekly standing order for money to go into a separate account for my other spending. I have a set amount each week to cover my general and lifestyle spending. I know if I have money left over at the end of the month, I can save this. If I find I have to transfer money more regularly then I know it’s time to review my spending plan. This makes it easy for me to manage and I know I am spending in line with my earnings.
For this to work you will need to create a spending plan. You can do this on a piece of paper. Take it a step further and allocate money to a separate account for holidays and other non-monthly expenses.
Anything you have to do manually is just adding to your workload. Automate all payments and set up standing orders as above to automate all of your monthly outgoings and investments.
As part of your spending plan you need to save for the future so make sure to set aside some money. Have it automatically go out into a savings, investments or pensions account. This way you know that you are building wealth regardless of what is going on in your life.
Whether it’s a quick ten-minute money check-in each week, a 30-minute review at the end of the month or a longer review every six months, find a process that works best for you. Yes, you need to find out if you are on track but this doesn’t have to be intensive.
If you are doing the basics such as being on top of your spending and automating your investments you are building a strong foundation. You can review progress towards your priorities such as paying down debt or building savings, but with the right structure, this should be happening automatically. Once you have achieved your initial priorities you can update your plan.
Focusing on the right habits will mean you are making progress financially, even if you are not on top of your money as much as you like.
There may come a point where your financial situation is too complex or you have several priorities that you need to balance. In this case, you may wish to work with a financial planner to take away this burden. In the meantime, following these simple steps will ensure your money is one less thing you have to worry about - for now!
This guide is for information purposes only and is not intended as financial advice. Financial advice should be specific to your individual circumstances. Should you need advice you should speak to a trusted financial adviser.
