The family finance guide: simple tips to make your money go further

Whatever stage you’re at as a parent, from adjusting to live with a newborn, to negotiating the shift to school, or coping with the (sometimes unreasonable) demands of teens, managing money is always key.

As Ellie-Austin Williams, the founder of financial wellbeing community ‘This Girl Talks Money’ and author of Money Talks: A Lifestyle Guide for Financial Wellbeing, explains, “Finding easy, effective ways to save cash and spend smarter not only makes you feel better about and more in control of your family finances, it soon adds up, and has positive impacts for the whole family, from helping your monthly budget stretch further, to allowing you the leeway for extra treats, experiences or saving for the future.”

What’s more, many of these tips can be easy to achieve. “When it comes to money, you can really make a difference with small, simple changes that help you feel more confident about and have a more positive relationship with your finances. ” Ellie says.

“Money is one of those areas in our lives that, because it can feel complicated and overwhelming, it’s easy to put our head in the sand. Even more so when you’ve got the pressures of adjusting to big life changes, and the daily ups and downs of family life getting in the way. But I’m a big believer that when it comes to financial wellbeing, we need to be looking at what we can do to engage with our finances and take control as much as possible. When you know what’s going on, and you’ve got those numbers, you have the ability to make decisions. You’re armed with the information that you need to change and improve your situation.”

Here Ellie outlines simple, effective ways families can take control of their finances and make their money work harder.

Get budgeting

The first thing is to get on top of your monthly income and expenditure. If you don’t follow a budget, now is the time to start. “It’s vital to have a really clear, bird’s eye view of your overall financial picture,” says Ellie. At the most basic level, that means knowing exactly what is coming in and going out of your bank account.

“Split your monthly income into three areas: needs (rent/mortgage, bills, food, transport and childcare), wants and future you,” says Ellie. “Everyone’s situation is different, but a helpful method is to work out how much of your income you spend on needs as a percentage (eg 50 per cent) and then split the remaining amount of income in line with your goals – for example, 30 per cent on wants and 20 per cent on future you. If you need to cut spending, this should ideally come out of your ‘wants’.”

To get an idea of how much to budget for, look at recent household bills to get an average spend. “Be aware that these will fluctuate over the course of the year – so, for example, in winter energy bills will naturally be higher than in summer. While in summer, you may need to set aside more for childcare or activity camps during the school holidays.” Ellie also suggests trying to come in ‘under-budget’ where possible: “Don’t feel that, because you have a set amount for supermarket shopping, you need to spend this. Port any leftovers into your savings account.”

There are lots of different options for managing your family’s finances. “Some people like a spreadsheet, because they add everything up for you and are easily shareable with other family members,” says Ellie. “But there are also loads of helpful budgeting apps you can try. Tools like Moneyhub plug into your bank accounts and pull up the data to analyse your spending and help you manage your money.”

As Ellie explains, it’s about finding a solution that works for you. “If you enjoy the user experience, you’re more likely to stick to it. Then, once you know where you are money-wise, you can start thinking about things like, ‘Where have I got flexibility?’ ‘What could I do without or what do I not use often?’ ‘Are there ways I can be more efficient with my money?’ All of those questions can come once you’ve got that clear financial snapshot.”

Be smart with bills

When it comes to ‘needs’ like bills, says Ellie, there are things we can do to help minimise them. “For bills where you’re on a contract, particularly things like car insurance, home insurance or phone bills, make sure that you’re not automatically renewing that contract,” says Ellie. “Shop around and use comparison sites to compare prices and see what else is out there.”

Do this even if you don’t actually want to switch providers. “If you ring them up and say you’re thinking about changing because you found a better price with a competitor, a lot of the time they will be able to find you a better deal.” She recommends putting a date in your diary two months before a contract is due to expire to remind you to start looking around, so you’ve got time to negotiate.

“Energy bills can be a particular source of stress but, if you haven’t already, getting a smart meter installed can be a way to keep track of what you’re spending in real time and help you be more mindful about your energy usage. Do an appliance audit – some old appliances can be very energy inefficient, so it may be worth replacing these. And look at how you spend as a family – having a family mobile plan, for example, may work out a lot cheaper.”

Stay on top of subscriptions

In the streaming age, it’s easy for subscriptions to add up – especially when you’ve got kids. While the odd £7.99 a month might not seem much in the grand scheme of things, these can soon pile up.

“I would encourage people to regularly review subscriptions and ask yourself which ones you’re actually using,” says Ellie. “It’s so easy to sign up for those free trials and then forget about them, and the amounts can add up really quickly. Set a reminder every couple of months and go through and cancel the ones that you’re not using.”

Before you sign up for a new service, pause and ask yourself, ‘Do we really need this?’ Or search around for cheaper or, better still, free alternatives. With kids games, for example, there are free apps like CBeebies that don’t require any in-app purchases.”

In terms of TV subscriptions, try to adopt more of a ‘need’ mindset. “We all lead busy lives, and only have a finite number of hours in the week to actually watch things. So focus on, say, the one or two providers you use the most, and work through their titles. Consider swapping them around too. It’s fine to cancel something for a few months and then resubscribe when you need it again.”

Expect the unexpected

However much you plan ahead, there will always be things you haven’t bargained – or budgeted – for. From school trips and after school clubs to broken down cars and boilers, how do you deal with those unforeseen costs?

“Always expect the unexpected when it comes to money and costs,” says Ellie. She recommends setting up a sinking fund — basically a contingency pot for those surprise expenses that arise. Estimate the annual spend on these ad hoc payments and set yourself an appropriate target. I’m aware it’s not always easy to build that up because, when things are stretched, you might not feel like you’ve got money to set aside each month. But you know that these costs are likely to come up, and the more prepared you can be, the better.”

Even if you can only set aside a small amount each month, it will help, and mean less scrambling around for cash at the last minute. “You can also make specific savings pots for different things you know are coming up. Whether it’s school trips or clubs, holidays, or birthdays and Christmas, this will help keep your budget on track.”

Share the load

If you’re worried about money, you won’t be the only one – and sharing advice, time and resources with others can really help, whether it’s passing around clothes that kids have outgrown, or sharing school pick-ups to save on childminders.

“Schools can be great for this,” says Ellie. “Many hold second-hand uniform and school book sales – or even Christmas jumpers and fancy dress costumes – to help parents out. In a similar vein, you could suggest creating a uniform exchange at any clubs your children attend, so parents can pass on kits their kids have outgrown, and have other items passed onto them.”

“When it comes to childcare, are there ways you can pool your resources with other parents, by sharing after-school pick-ups – or setting up a babysitting circle where you all get a certain number of free nights.”

Finally, when it comes to spending, there are lots of ways to save. “Rather than buying new, where possible opt for preloved items online. Ebay and Facebook Marketplace are great for toys and clothes – you can often buy bundles that can work out quite cheap and you’ll even find lots of new, unused and unworn items available at discounted prices. Sites like Freecycle or local community groups can be great for all sorts of things from furniture to bikes and toys.  Or at sites like The Library of Things, you can rent expensive items you might need occasionally – from gardening and DIY tools to homeware – rather than buying them outright.”

Just opening up to other parents can have a hugely beneficial effect, for you and them too. “Having young children is a messy, expensive, chaotic time of life,” says Ellie. “Sometimes it takes that one person to bring up the topic and then everyone can start sharing ideas. By being brave and having those conversations, you can all save money, as well as build friendship and solidarity.”

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