- Keep an eye on money that’s coming and going.
- Cut back where you can – but remember that being frugal doesn’t have to mean going without!
- Sell things you no longer need and buy second-hand when possible.
- Consider purchasing cleaning products that are refillable.
Learning how to manage money can be tricky, especially if you have a family to budget for. That is why we’ve gathered together our top money management tips so that you can learn how to save money all year long. Let’s begin!
How to manage money: create a budget
If you want to know how to manage family finances, the key is to make a budget. While this may sound intimidating at first, it’s actually easier than you’d think. Here’s how:
- Keep a spending diary for one month. Use a spare notebook and write down every purchase you make, including all card payments and checks.
- At the end of the month, categorize your spending by rent, utilities, entertainment, food, travel, and so on. This will give you a visual on what you’re spending the most on. It will also help you to identify the areas where there is room to cut back on spending.
- Compare the total spend to your monthly income. This will determine whether you are living beyond your means. Keep in mind that some months are more expensive than others!
- Make a list of annual expenditures. Write the months of the year on a sheet of paper and enter the dates and amounts of annual payments, such as car payments, or periods of heavy expenditure – like Christmas – from the previous year.
- Determine how much you should be saving each month. Divide the large annual payments by 12 to get the average amount you should be saving per month. And don’t forget to anticipate any potential future payments, such as holidays, weddings, medical bills, etc.
Money management tips to stick to your budget
What’s the point of making a budget if you’re not going to follow it, right? Sometimes, learning how to manage a family budget is more challenging than actually making the budget. But if you really want to know how to manage finances and save money, it’s essential that you stick to your budget.
Here are some helpful suggestions for how to manage a family budget to stay in control of your finances:
- Round up all your figures. When recording how much you’re spending, always round up to the nearest 10. This will allow you to build a small money cushion, which will definitely come in handy if costs are higher than you anticipated!
- Open more than one bank account. It’s harder to spend money if you don’t have immediate access to it! Consider opening a savings account for big annual expenditures, and designate your main account for direct debits. You can then transfer a monthly sum to a current account that is linked to a debit card for normal, everyday spending.
- Say ‘goodbye’ to credit/store cards. Whatever you do, don’t live on credit! Not only will you eventually have to pay everything back – with interest, we might add – but it’s incredibly difficult to keep track of how much you’re actually spending.
- Organize direct debits and carry cash. It’s best to use direct debits for predictable monthly expenditure, like utility bills, rent, loans, and so on. For daily expenses consider withdrawing cash on a weekly basis. This is a great budgeting hack to ensure that you’re spending only what is in your purse. You’d be surprised at just how much money you can save with this trick!
- Know the difference between wants and needs. When it comes to learning how to manage finances, it’s essential that you understand the difference between things you want and things you need. We understand just how easy it is to buy new things when you don’t actually need them or to eat out when you can enjoy a wonderful home-cooked meal instead.
- Shop wisely. While this may take a bit of effort, do the research before making purchases to save money. Search for coupon codes, check the difference between Internet versus in-store prices, be patient for the sales, and buy your favorite items in bulk. This money management tip will make you a smarter shopper!
- Barter, upcycle, and buy second-hand. Saving money can be good for both the environment and your local community. Find a local skill-share and exchange your typing skills for gardening help for free. Search for bargains at your local charity shops or browse the websites that give away items for free that you can then upcycle.
- Farmer’s delight. If you want to lead an eco-friendlier and healthier lifestyle while also saving money, you can consider growing your own fruit and veggies right from home. Check out more ways that you can do so, here!
Learning how to manage finances for your family is just the beginning. These tips only work if you put them into practice. The good news is that you’re already one step closer to saving money and leading a more financially stable life.