How to manage your family finances.

In many ways this is a difficult hub to write.

It is directed towards those who really cannot manage money.

For every one of those there are many who do O.K. but feel they need to do it better.

There are others who feel they do not need any help at all they are quite happy doing it their way, and for those who do feel this way it would be really good to have some comments proffering their view.

Ideally the parents in the home or else just the inhabitants if they are not yet parents, do need to agree about what they want their money to do for them and how this should be achieved.

Trouble lies ahead for any relationship and management plan where one is a “have money must spend it” and the other is a “have money must save it” type.

There are many such variations on these themes and some do end up in a financial disaster which has nowhere to go but down or backwards. This we would like to prevent if we can.

This introduction could well have been headed “Do you and your partner have similar expectations with respect to money?”

But working on the expectation that you are a couple who could do with some advice on managing your household finances, there are a number of things you must do as a priority and as soon as the money comes in.

The first requirement is to Pay the Mortgage or the Rent-no ifs, no buts, no excuses.

Next, for the weekly shopping get rid of the plastic.

You may well think this is the way to do it and you can get out all those excuses if you must, but I’ve heard them all before and they are simply not valid.

You need to sit down together and think about what you need in the way of basic food requirements and household expenses.

This will not be easy, forget about take a ways and other indulgences, which are not necessary when you come down to the basics of survival, and depending how much money there is in your household we’ll come back and talk about that later.

Now, every week you need to take out the cash amount which you have decided is reasonable or if you do it fortnightly, divide it into two and spend half only the first week and the other half the second week. You may NOT opt to spend more the first week and less the second: that simply does Not work.

Now you’re off to do your first shop without the plastic and your second shop should be easier.

Remember stay away from the plastic.

Now you’ve survived those two weeks and I take it that you CAN count, can’t you?

Who should do the shopping, well certainly not the biggest spender in the house, so you may well find yourselves rearranging the household duties.

Now that we’ve taken care of the mortgage (rent) and basic food requirements we can think about things like running the car.

That’s a big one.

You may well have to do some homework to find out just what running the car does cost you, in repayments, petrol, general maintenance, likely repairs, parking, tolls, tyre replacements, insurance, registration etc. Do these things when you are not tired and cranky otherwise it will not work.

Now that you’ve added all these things up and looked askance at the total you see before you give yourself some time to recover from shock and divide the total by 52.

That’s the amount you must set aside each week either in a special bank account or in some large envelope from which you will take car running expenses only, making sure you don’t suddenly have a big expense that you have not allowed for.

Once you’ve mastered the basics, you’ll find, unless you’re desperately short of money there may be some flexibility in the way you approach things.

Now how many of you have thought about health insurance.

Now is the time to do it.

So do something about it when you’re young and before you start your family.

If you put health at the bottom of the list, you’ll end up getting what you deserve.

So many build big luxury houses and spend those first important years of your child’s life working your butts off to finance the overly well equipped house, has no-one ever suggested to you that you do not need luxury and that saving on health, the most important thing in your life is not the way to run your household.

And we still have to allow for electricity, gas heating and council and water rates which it does not pay to run away from.

Do the add up again and divide by 52 and decide where you’re going to put that money or do you have sufficient self discipline to leave it in the bank and draw on it when you need it.

By now you’re screaming for the plastic, have you thought about clothes and maybe then a holiday?

And what about gardening requirements, that is if you’re fortunate to have a garden.

It’s all getting too difficult, isn’t it.

Think of the plastic for emergencies if you have no other resources and only draw on it in those circumstances.

If you have a large disposable income well of course you’ll have much more flexibility and did you know that many wealthy families cut household expenses ridiculously low, they can be so MEAN.

Well we’ve made good progress this far, and now you need to practice and remember stay away from the plastic. There’ll be another hub later on to try to assist those who are already struggling and to open up the money management pathways for those who do well and want to be able to use their plastic wisely.

Self restraint is what it is all about, and learning to count and divide and quarantine and keep the splurging until you can afford it.

But if you’re already in financial trouble it will not be an easy road out and where you need to start is to sit down together, talk about it, agree and stick to it, and revue your plans regularly, preferably together to find out where you’re going wrong.

No shouting and screaming please, if the stress is too much go for a walk and at least that way you’ll be saving petrol and as regards shoe leather, a pair of sneakers even a cheap pair will last you a long time.

Happy budgeting, you have to start somewhere. Take cash to the supermarket and leave your credit cards at home.