MoneyMagpie

Feb 23

Dealing with income shortfall In your family budget

A budget is a very useful tool to use in managing and controlling your family finances. When put together well, it should capture all your income and earnings; and what you plan to spend them on. Most financially savvy families use budgets to stay on top of their finances. If you and your family are not already doing so, you can start now and reap the benefits.

Butwhat do you do when your budget shows that your income is not enough to cover the cost of what your family needs. Recent rises in inflation are pushing up the cost of goods and services. Supermarkets, phone, and internet, as well as travel companies, are all increasing the prices of family spend items such as groceries, phone and internet services, utilities, travel costs and other essential supplies. However, despite these increases, a significant number of families will not see corresponding increases in their incomes. This is likely to have an impact on their standard of living, putting pressure on many families.

Getting the best deals

Managing a tight budget means that you should try and make the most of your money as best you can.  This is a good time to take advantage of sales, discounts, vouchers and reward schemes as part of your household shopping. Also, you can shop around and use the internet, such as comparison websites, to search and make savings on services including utilities, TV packages, phone services, holidays, financial and insurance products, etc.

Using credit

The reality of family life, however, is that it may not be possible to cut down on most expenditure. Money could be needed for family emergencies; to make big purchases to ensure there are no disruptions to family life, or to support expenses for family activities such as travel and holiday.  In this case you can consider borrowing from a lender if you are able to do so.  Taking advantage of credit cards that offer reward schemes also helps you to make further savings and cut down on the cost of some of your family purchases.

Limiting your spending

If the savings from the deals are not enough to cover the shortfall, it may be time to change the family’s spending pattern by reducing or eliminating some spend items from the budget. You and your family should discuss and decide those items, and can include some non-essentials such as entertainment.  You can also make certain changes and cut down on items such as food bills, utilities, fuel, etc.

Whatever decisions the family chooses, it is important that they are well planned and budgeted for. You should also stick to your budget and ensure that you are in control of your money and spending.

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