Written by Ross Marais
Let face it, money isn't the most exciting topic in the world, but it's a necessary evil that play a big part in our lives. Being a super mum or dad, putting up with all the things that come with raising a young family, trying to find some “me” time and trying to maintain some sort of social life with friends it can be easy to not make time to get a check up on the family finances. However with money being one of the major causes of stress and relationship issues it is import that you are in control of the family finances.
Working with young families to help them to understand and plan they finances has lead to many very interest conversations and discussions. Helping couples and family to find a compromise, when they have different ideas of what is important, for example, when one person has a goal of starting a their dream business and the other partner wanting to buy a house or take 3 overseas holidays a year.
Some couples work best when they share bank accounts, others do not. There is no right or wrong answer on how best to manage the family finances, it all comes down to finding a way that is simple and easy to understand, that works best for you and your family.
Here are my tips and things you need to consider, in order to take control of the family finances and to help improve your relationship with money.
Discuss and list your relationship & family goals:
When it comes to taking control of your family finances it is important that you and your partner are both on the same page as to what you are wanting to achieve both individually, as a couple and most importantly as a family. As without knowing this, it makes it near impossible for you to make changes and plan for the future. Set, some time aside (if possible) for you and your partner to consider what is important to you and what financial and lifestyle goals you have.
Is planning your wedding important, buying your first house or having another baby on the horizon? Do you want to ensure your children receive a private school education? Are you wanting one of you to stay home and care for your children for a number of years?
Whatever you think is important, the key is to discuss, agree and prioritise on what your relationship and family goals are, as all of these decisions have financial implications.
Understand what money means to you
Money is such a strange topic and for the most of us it is still a taboo subject. When you throw in another complex layer of family and relationships, things can get even more confusing and uncomfortable.
It is important that you understand your own and your partners, attitudes and beliefs about money. Understanding if you are you a spender or saver can take some time to figure out, but it is essential if you want to take control of your family finances.
One way to do this is to think about the last few big financial decisions you had to make. Did you you enjoy talking about and handling money or does the thought of it make you want to scream? Our upbringing, backgrounds and experiences will influence how we think, feel and manage our finance. Understanding how you and your partner approaches financial matters will make it easier to create a money plan that suits you both.
Understand your Current financial situation:
Knowing where you are right now is the only way you can begin to move forward and put in place plans to reach your financial and lifestyle goals.
Take stock of your income: What is coming into the bank account each week or month, including your family income, investment or rental income plus any government benefits and rebates your may be receiving.
Know your expenses: Get an understanding of your what it cost you and your family to live. Not a very fun thing to do, but so important if you truly what to take control of the family finances. Regardless if your earn $1000 or $10,000 a month if you spend more than you earn, you are going to be broke.
Make a list of all your personal and household expenses. Be sure to include big bills and all those small ones as well. This can be done on a piece of paper, in an excel spreadsheet or using an online budgeting tool (like the one you can find on smart money).
Calculate your net worth: This is one of if not the most important number when it comes to understanding your personal finances. Add up your total assets and subtract your total debts & liabilities and this will give you your net worth.
Appoint a Family financial controller:
Have the conversation about who will handle the family finances and decide if this is going to be one person or if it will it be a shared responsibility. Maybe this is a rotating position to ensure you share the workload.
Whatever works for you, make sure you’re both happy with the decision. It is important that someone is in control of the household expenses, and is making sure the mortgage and the household bills are being paid on time. And most importantly if you are on track with your family financial goals.
Another good idea, to ensure everyone is on the same page is to lock in a date where you discuss the family finances together, this might be once a week or once a month but making some time to for your finances will ensure that you stay on top of things and don't let the family finances get out of control.
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