With Father’s Day around the corner, we thought we’d prepare a list of tips to help Dad find the happy balance between good finances and family.
Before having kids, financial decisions tend to be relatively straightforward. When children arrive, though, parents need to start thinking in a new way. Having children ups the cost, for one thing.
Even five years ago, the NATSEM research centre at the University of Canberra found the cost of raising two children for a typical middle-income family was $812,000.
Having kids also means the stakes are higher, so it is more important than ever to make smart financial decisions.
One of the best ways to find a happy financial balance at home, is to be organised.
Book a time to sit down with your partner and other significant members of the family, to review your finances.
Look at your bank statements. Review your income and expenses. If it helps, make a spreadsheet, which you can organise into categories like ‘Travel’, ‘Household Expenses’ and ‘Education’.
When you reach an important crossroads, like expecting a new baby, or if you feel overwhelmed by your financial situation, financial planning is especially important. If nothing else, it will help clear your head. Ideally, it’ll also help you implement effective strategies for moving forward.
Manage your debts
Debt has ballooned in Australia in recent decades, according to NATSEM. Household debt includes your mortgage, HECS debt, credit card debt and store cards.
Some debt has advantages, and can help you get ahead financially. For example, most Australian home-owners have a mortgage.
Credit card and store card debts, though, can slip away and become hard to manage. Spending is easy when it’s as simple as putting it on a card. But watch your credit debt doesn’t get away from you.
ASIC’s MoneySmart website has suggestions for smart ways to use your credit cards.
- Keep track of your spending by regularly reviewing your statements.
- Look for unauthorised transactions and report immediately.
- Pay credit cards on time. You can set up a direct debit to pay off a fixed amount at regular periods.
- Set a sensible credit limit.
- Avoid using credit cards to make ends meet.
Know yourself. If you tend towards racking up a credit card debt, set your limit low, or move to only using a direct debit card.
Financially, you never need to feel alone. There are experts out there who can help you manage your household finances, and make positive decisions for the future. Your tax accountant or financial adviser can help you make effective decisions about superannuation, managing your tax, and balancing your budget. Your Smartline Adviser can help you make effective decisions about funding your property.
Book a chat with your Smartline Adviser to discuss how they can help you.
Source: Philips, B, Li, J, Taylor, M (2013) Cost of Kids: The cost of raising children in Australia, AMP.NATSEM Wealth Report, Issue 33, May, Sydney pp 1, 7