Following on from last week's feature on family budgeting, qualified life coach Lisa Wynn and founder of Coaching for Dads offers Playpennies readers some exclusive tips for making household finances work:
Few of us are really good at living like a monk! Be realistic about your budget and create enough financial ‘space’ or provision for the things that make life feel right for you. You can always trim this back if necessary when you're working out the overall figures.
Check your budget feels right. If it feels austere then it you're obviously less likely to stick to it. If, for instance, you are saving for a special holiday then you might be tempted to make the budget harsh so that you can go on holiday sooner. Be honest with yourselves - you might make the holiday more likely if you postpone it six months and allow yourselves a meal out once a fortnight. A budget needs to balance the future with the present.
Have a theme or goal for your budget. Most budgets are set as a restrictive thing - cut down on this or that. Instead, think of it as a means to an end - have an exciting goal such as ‘Raising Funds for a New Car/Holiday’ or ‘Pay off the mortgage 5 years early’ or a mantra/theme such as ‘getting free, creating choices’.
Personalise your budget - name the columns with titles that make you smile! If you are saving to start a new business for instance then label that savings pot as ‘telling the boss where to go savings’ or write your favourite holiday destination at the top of a savings column - keep telling your emotional brain why you're doing this and the budget is much more likely to be something you stick to.
Make this an opportunity to practice talking to each other about money and about what you want in life. You are doing yourselves such a favour by setting a budget - especially if you stick to it. Add to that favour by discussing what is really important to your family - how can money help you to make those important things happen? In this way money becomes an exciting vehicle rather than a plague we have to put up with.
Armed with Lisa's good advice, what better time to get to grips with overhauling the family finances than the start of a new year? Looking at your budget is a daunting prospect, there's no denying that, but the longer-term benefits of doing so usually make a few hours of number-crunching well worth it.
I know that getting to grips with our household income and outgoings actually helped to alleviate a lot of stress. Ignorance isn't always bliss; not knowing what we were really spending from month to month or where we were wasting money was more like denial and I definitely sleep easier at night knowing that we've taken steps to get our finances in order. So if you fancy a debt-free 2010 or even just a more penny-wise New Year, why not take a deep breath, dig out the calculator and overhaul your family spending. And remember Lisa's advice; it's not about living like a monk, but about making your money go further.