Juggling the family finances
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Juggling the family finances

There is no escaping the fact that some times of the year are just more expensive than others – and October is definitely up there alongside Christmas. As children head back to school, parents must try to meet the financial demands that education makes on their resources.

Maintain the habit of keeping a budget. It is an excellent way of avoiding unpleasant seasonal expenses such as car licences, insurance and schooling bills- Sandy Calleja Portelli

The scale of schooling bills depends to a large extent on the choice of school and extracurricular activities your child attends, but the key to handling the family’s finances remains the same.

If the scholastic year kicks off with an overwhelming amount of expenses, it may be time to take inventory of your financial situation and establishing a budget. Budgeting is crucial to avoid being overwhelmed by a similar set of bills come January – and the beginning of the second term.

The first task is to calculate your net annual income (after tax and National Insurance deductions), then list any debts in order of priority. This would include a mortgage, income tax, VAT or social security contibutions – regular payments that should be met.

Other debts could include unsecured bank loans, credit cards, hire purchase agreements and school and extracurricular fees. Remember to include any exam fees that will need to be paid later on during the year (Matsec exams and any other external examinations including dance or music among others).

The next step is to calculate your current living expenditure (food, transport, household bills...), allowing you to work out a budget. A comprehensive budgetary planner can be downloaded and used at leisure from www.fido.asic.gov.au (click on ‘other calculators’ on the right-hand side of the site) – complete with pre-listed expenses and converters to help you calculate your expenditure on a weekly, monthly or annual basis, the planner calculates your financial status.

If your final total is (literally) printed in red, you need to find ways to cut down on your expenditure or increase your income. Taking on extra employment or overtime may be an option to be considered by one or both parents – an option that must be weighed against the needs of the children in the family.

Hosting foreign students or taking in a lodger are also worth considering if you have the necessary space and inclination to share your home with strangers. Don’t forget to consider your regulatory obligations if you decide to do this (e.g. licences, taxes…).

For most families, decreasing expenditure is the quickest way to bring your finances in line. When planning cuts, however, it is important to be realistic as a budget that is too drastic could look very promising on paper but prove impossible to live by.

Some old-fashioned housekeeping practices can drastically reduce routine expenditure, especially with a family. Planning a menu a week in advance and shopping on a weekly basis enables you to patronise the stores that offer the best prices. Tailoring the weekly menu to suit your schedule allows you to plan quick meals on busy days and more time-consuming (but possibly cheaper) meals when time permits.

Remember that pre-packed food and ready-made meals are more expensive than cooking from scratch – and if you have the space, a chest freezer allows you to cook meals in batches and freeze them until needed.

Always shop with a list and stick to it; if children’s pester power overwhelms your resolve, organise shopping trips for when the children are in school. Bear in mind that those impulse buys soon mount up.

Having finalised calculations and any cost-cutting measures, it is time to decide whether the family’s finances cover all the activities your children wish to attend. If the answer is no, an honest chat with Junior is on the cards.

Explain the situation and, if possible, ask the child to decide which activities to keep and which need to be relinquished. Another possible scenario is one where the annual family finances are adequate to cover the expenses you have taken on but cash flow becomes a problem around this time of year.

In this instance, the budgeting exercise undertaken previously will prove extremely useful. Armed with an in-depth knowledge of the family’s outgoings enables you to allot a monthly sum to cover upcoming expenses.

Once you have cleared your current hurdle, maintain the habit of keeping a budget. It is an excellent way of avoiding unpleasant seasonal expenses such as car licences, insurance and schooling bills.

It is also important to start a savings or investment scheme; speak to a financial consultant for advice about the most suitable option in your circumsances.

Finally, remember that children grow into adults who must also manage their finances responsibly – setting limits within your financial limits is an example worth passing on.

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