The word “family” has been around since the fifteenth century, and while it still contains six letters, the definition and composition of ‘family’ has changed a lot in the 21st century.
But some things haven’t changed. Parents everywhere still do whatever it takes to provide for their family. Supporting the household is a top priority and financial decisions (good or bad) still get made consciously or unconsciously. The Old Mutual Family Financial Coaching series wants to address the money worries you may have. It tries to demystify and simplify personal financial matters for you by being relevant and constructive.
To start you on your journey towards family financial wellness, let’s take a closer look at budgeting for you and your family.
With the close proximity of our families during the COVID-19 lockdown, we’re learning a lot of things about them and about ourselves. We’re picking up things that we think we should be better at, like maintaining balance, staying fit, eating healthy and discovering new things that we can do together. At the same time, it’s essential to keep our finances healthy by including budgeting in the mix. And what will really help us achieve success, is to include the kids in setting a family budget. You may ask why it’s important to get the kids involved in setting the family budget. Because when everyone is on board and agrees with the reasoning behind the budget, co-operation will be so much easier.
Getting the ‘buy in’
Failing to get ‘buy in’ from your children means that they will constantly ask for things that are not necessary or that you cannot afford simply because they don’t know how money works. One of the ways to get ‘buy in’ from your children is to incentivise their behaviour. Letting them earn cash for extra chores can help them understand the value of money, especially when they use it to pay for personal items like data or games.
Family goal setting
1. Set a family goal, like a holiday that you all take after lockdown and allocate an appropriate amount of money to it.
2. Work out how much you need to pay for the trip.
3. Set a date for the holiday.
Once that is done, you can find the places in the family budget where you can save some money. Right now the grocery bill is probably the one thing that is growing for most families. Food and snacks that were bought before lockdown have dwindled and everyone wants more. Food is essential, but maybe not the snacks. Set the amount that is available to spend on groceries and stick to that.
This is what you can achieve by doing this:
• You would have created a healthy chat about finances in your home
• You will have something to look forward to after all this is over. Hope for the future is great medicine for the human mind.
For many, family budgeting will be a new experience. Approach it with a positive attitude and a willingness to learn. Your kids may surprise you by teaching you a thing or two about saving money. Try 22Seven (www.22seven.com), our easy to use, free budgeting tool to get you started.
Visit www.oldmutual.co.za/personal/find-advisor to speak to an accredited Old Mutual financial adviser about family financial wellness.
Old Mutual Life Assurance Company (SA) Limited is a licensed FSP and Life Insurer