Today’s guest post is from reader Alban Guillemot who writes in Australia for a personal finance and credit card advice site, creditcardfinder.com.au.
Families come in many shapes and sizes, but most of them have one thing in common — they want financial security. Simply adjusting your perspectives on money and spending and openly talking about your goals as a family can help to ensure successful and uncluttered finances:
- Be clear on your goals as a family. Open and honest communication with all family members is important because if one person is not convinced of the family’s financial plan, those plans can be sabotaged by overspending and ignoring the budget.
- Avoid social competition. As you make your budget for the extras your family would like, consider why you want what you want. Make sure you are not making spending choices based on what you think someone in your income bracket and your neighborhood should have, but choose extras you want and would enjoy. As soon as you start spending to keep up with your friends and neighbors, you have stopped focusing on your family’s needs and wants
- Consider your family before making a purchase. Always keep your family budget in mind before you make a purchase that has not been accommodated for in the budgeted. This also goes back to the previous point about why you are making the purchase — is it a purchase that is good for the whole family? Consider the impact of an impulse off-budget purchase on your family’s savings and goals.
- Hold regular family budget meetings. It is not enough to create a family budget, you have to also maintain and monitor it to make sure it is achievable and accurate. This can be done at a regular family meeting, where you also discuss how each member feels about the budget and the spending, and whether they can see room for improvement, or suggest a change of direction.
Discussing finances with your family with honesty and respect is the key to successful family finances, but while discussions are important, you also need to be able to implement the systems to follow through. Once you’ve completed the four tips from above, you’ll find ways to customize each system to your family’s needs and find a way to ensure your family is financially secure now and into the future.