Surviving the Covid-19 lockdown goes beyond wearing the mask. For many, it may also mean surviving the financial impact of a lockdown. As the saying goes “healthy finances make healthy families” and so setting a family budget is key. But how?
Old Mutual Family Financial Coaching series is aimed at helping you solve your money worries. More importantly, it also helps you understand your current financial status, and provides you with guidelines on how to set up a suitable budget for your family.
How to set a healthy family budget
Even with the lockdown, key on all parents’ priorities, is providing for their families no matter what. Like many parents, we’ve had to adjust our own family budgets to include more home cooked meals and less petrol. But just how much can we spend without going into unnecessary debt?
To make a happy home, set a realistic budget. The experts suggest you follow these simple steps:
Include the kids
Have a family chat about finances. Yes, include your kids. They may surprise you by teaching you a thing or two about saving money. Most importantly, enjoy this new experience with your family. Make it a fun learning experience for all, including yourself:
- Try 22Seven, a free budgeting tool to get you started
- Role play different scenarios and even your current situation.
Get the ‘buy in’
When everyone is on board and agrees with the reasoning behind the budget, co-operation will be so much easier. The cherry on the top: your kids will no longer ask you for things you simply cannot afford. Now that they know how money works:
- Give them incentives. Let them earn cash for extra chores. They can use it to pay for personal items like data or games.
- Teach them to compromise. Discuss limits and expectations together. Your kids will co-operate better knowing you share their dreams. In turn, you would be relieved to know they understand the limits and you’re not expected to deliver right now.
Set family goals
Give your family something to look forward to after all this is over. There’s certainly something your family has missed during lockdown, or that has become more important. Use this to set a family goal, like a holiday that you all take. Allocate an appropriate amount of money to it. Then make it real:
- Work out how much you need to pay for the trip.
- Set a date for the trip.
- Now, find places in the family budget where you can actually save some money. This may take some compromise from all.
- Set up some incentives along the way whenever a milestone is reached like a family date to the ice rink or dinner that month when you pay off a loan or any outstanding bad debt
Remember: Hope for the future is great medicine for the human mind. Stay positive.
For more help on setting a family budget:
Click here to speak to an accredited Old Mutual financial adviser about family financial wellness.
Old Mutual Life Assurance Company (South Africa) Limited is a Licensed Financial Services Provider