These days, it’s more common than ever before for families up and down the UK to live pretty much pay-cheque to pay-cheque.
Hardly an ideal way of getting by but a reality nonetheless – the simple fact of the matter is that life gets more expensive all the time and there isn’t always extra money around to compensate.
All of the above adds up to a situation where proactivity is more important than ever before. With the right approach and a little advice where needed, it’s possible to make even the tightest of family budgets go at least a little bit further than they might.
Here’s a quick look at five of the most common family finance mistakes that could be doing a number on your monthly budget:
1 – Living on Credit.
It’s perfectly normal to have at least a couple of lines of credit in use at any one time – credit cards andfor example are about as standard as the daily sunrise. However, if you’ve found yourself in a situation where you’re juggling multiple lines of credit with no real reason as to why, this is a wholly unnecessary expense that will put pressure on your budget. No matter what it is you’re looking at, credit is never offered 100% free of charge and sooner or later will cost you.
2 – Not Budgeting Carefully.
Perhaps the single most common family finance mistake of all is that of simply not bothering to budget carefully. If you know how much there is coming in each month, you should be able to work out how much on average you’ll need to spend on bills etc. and then see what’s left over. You should budget in advance for all essentials like food, bills and general living expenses – the rest should then be earmarked for anything less important.
3 – Ignorance is Bliss.
The habit of not tracking your monthly expenses is one that anyone should do their best to get out of sooner rather than later. You might find it more pleasant at the time not to know how much you’re spending every month on essentials and luxuries alike, but without this kind of information you cannot even begin to think about budgeting more effectively.
4 – Not Anticipating the Unexpected.
One of the worst mistakes any family can make is that of failing to have at least something set to one side for if and when the unexpected should happen. You never know what’s coming and as there’s always the possibility of an unexpected expense popping up from time to time, living quite literally on the red line is never a good idea.
5 – Confusing Needs with Wants.
Last but not least, if you were to track your expenses for a month and then split every entry into things you need and things that are optional, chances are the latter column would account for a pretty huge array of purchases. So, if and when the time has come to think about being more careful with spending, it’s a good idea to establish what you need to get by and think more carefully than ever before about the rest.