Friday, 9 November 2018

A Mum's Guide To Guarding Against Unexpected Expense

Being a Mum has never been a cheap enterprise and it’s certainly never been easy. But in the hectic and increasingly costly 21st century, parents are under more financial pressure than ever before. Are you sitting down? Research carried out in 2016 by the Centre for Economics and Business Research estimated that the average cost of raising a child to the age of 21 in the UK is an eye-watering £231,843. Even for the most scrupulous of financial planners that’s a lot of expense even for households where both parents work. In the age of austerity it seems as though for many of us our wages are stagnating even as our living costs continue to climb beyond our grasp.

Image by PxHere

Resultantly, many families are left with no recourse but to borrow. But as the cost of living rises, meeting our commitments to our debts can become increasingly untenable and our credit ratings may suffer. This can make managing our carefully managed household finances tricky to manage at the best of times, but what happens when life throws us an unexpected curveball in the form of unexpected costs? When your car breaks down, your plumbing springs a leak or your roof tiles start to rain all over your drive the expense can throw your finances into disarray. But Mums are masters of triumphing over adversity! With a little bit of knowledge and foresight, even Mums with limited incomes and poor credit can insulate themselves against the ravages of unexpected expenses. Here’s how…

Don’t assume that bad credit means that you only have bad options

Shortly we’ll discuss the ways in which, even in these austerity ravaged times,
households can take control of their finances to create a cushion that acts as a buffer
able to do this and your credit score is less than stellar does not mean that you only
have options. For example, guarantor loans from a direct lender can spare you the
additional expense of brokers’ fees. Plus their loan calculator can help you to determine
exactly what your monthly repayments will be so that you can budget accordingly.
As long as you have a guarantor such as a parent, friend or relative who can vouch
for you, you need not leave yourself at the mercy of unscrupulous payday lenders.

Every household can (and should) save

Your family’s finances should be governed by a budget. Only when you budget
can you get a clear idea of what’s coming in and coming out of your bank account.
In fact, the very act of budgeting will help you to feel more in control of your finances
and better placed to stop up all the little leaks in your household finances. However,
one thing that your budget absolutely must account for is savings. You should have a
direct debit into your savings account every month to ensure that you always pay in.
You can absolutely reduce that amount as times are lean so long as you boost it back
up when times improve. A savings account is a great, risk free way to grow your money.
Here are some of this year’s best savings accounts.

Keeping your kids happy should not cost a fortune
We all know families who are perpetually skint, yet their children all have the latest
games consoles and their very own LED TVs to play them on. Or smartphones. Or iPads.
When did it become Holy writ that keeping your children happy had to be so expensive?
It’s virtually impossible to guard against unforeseen expenses if our scant disposable
income is dedicated to buying our kids ostentatious presents.

Instead, condition your kids to value experiences over things. Take them places,
show them sights or challenge them to express themselves creatively. They’ll be happier
adults for it!

Make your debt work for you!

How much of your household expense goes on repaying your debts? How many
different direct debits do you have coming out every month, each coming out at a
different time with a different interest rate? Left unchecked, these debts can devour
our finances and make saving impossible. Worse still, they can prevent us from getting
good credit when disaster strikes.

Consolidating your debts into a single monthly payment with just one rate of interest
is a great way to make it more manageable. It will even improve your credit score as
all of your existing debts will be repaid and replaced with a single new one.

When you’re well prepared, unexpected expense is just another challenge for a Mum
to stare down and overcome!

**This is a Collaborative Post**

No comments:

Post a comment