by Mia Von Scha, Transformational Coach, motivational speaker, children’s author, student to two Zen Masters (aka kids), avid cloud watcher and lover of life
The majority of parental problems that I see in my practice are exacerbated by stress, and what can be more stressful than sinking into debt. So, here are some tips to sort out your finances and start the new financial year in a less stressful and more kid-friendly way!
The first step in sorting out your finances is to know what they are. Print out your bank statements and credit card statements and make a list of all the income and expenses that you have every month. Most people avoid this simple activity and would rather stay in the dark, but facing the truth is way less stressful than waking up one day to find out you’re bankrupt! So take a deep breath and just do it!!
You need to know your income and expenses if you are to create a successful budget and stick to it, and this is step number two. Work out your essentials each month and what they come to and always make sure that you are putting some money away every month into a savings account, or some extra money into your bond.
If you find that you are overspending and don’t have any “disposable income” at the end of the month, relax. Acknowledge this and also that you are not alone – the majority of parents find themselves in this position. Here are some tips to sorting this out by bringing your expenses down:
Cut up your account cards. If you can’t afford something, you shouldn’t be buying it. The time will come when you’ve saved enough and can treat yourself, but as much as possible, never use credit – and definitely don’t use credit to buy your groceries.
Put your credit card in a glass of water in the freezer. If you really need it, it’s still there, but you won’t make impulse purchases if you need to wait for it to defrost first.
Look at the debit orders you have
See if you can decrease your insurance, call your security company and ask them to relook a your monthly fees, cancel any unnecessary memberships. If you haven’t been to the gym in 6 months, make a decision to go or see if you can sell your membership.
Cell phones! Wow!
My husband and I just halved our phone bills by changing service providers. If your contract is at its end, don’t just automatically upgrade with the same provider – shop around, look for specials, ask for discounts. And if you’ve already got 5 phones at home, take a contract without a phone – if you add up the monthly payments and see what you’re really paying for that phone after two years you might want to rethink. Beware, too, of getting to the end of your contract and not upgrading or changing, as you are then still paying the monthly amount for the phone even though you’ve finished paying it off.
Take note of the cappuccino factor.
This is the name given to those little spendings that you do regularly and don’t think they amount to much. Like the cappuccino you buy on the way to work. Do this little exercise: Take one thing that you don’t really need but buy regularly – the coffee out, the cigarettes, the bar of chocolate. Now multiply the cost of this by the number of times you purchase it in a week. Then times that by the 4 weeks in a month, then by the 12 months in a year, and then by 10 years (and that’s not even including inflation, interest etc). You’ll be amazed by how much you could save over ten years just by cutting out that one thing… who knows, you could even be a millionaire!!
Awareness – of your spending habits, your shopping habits, your eating habits.
Look at your statements and see where the money is going. Are you eating out too much? Could you be shopping at a less expensive store? Are your kids wearing name brands when a regular t-shirt could do?! Shop, eat and live consciously.
This is quite a task, I know, but it’s very empowering when you get it under control. And you, your partner and your kids will benefit in the long run. Think of all those restful nights NOT worrying about the bills!!