New Years: Resetting the Family Budget

Published on January 4, 2016 8:39 am, by

Phew! Christmas is done.  Now it’s time to start thinking about 2016.  For some of us January is typically a time of rest and recuperation.  For others it’s time to get back in to the swing of things after a break.  In my house we ramp the fitness back up, clear the house of junk food, limit the alcohol for a bit and most importantly reset our family budget.

December and January are expensive times for us.  January shapes up pretty similarly to December for us with the onset of another school year.  Now is the time to sit downs and work out what the year is going to hold financially.  It’s time to revisit the regular expenses we need to budget for, see what’s left to put away for a holiday, and realistically decide how much we can save.

To find success for a family budget, where there are two of you, you need to do this together as you need to agree on your spending and saving goals.

Here are 10 tips for setting yourself up for financial success in 2016:

#1 Understand your 2015 spending.  Break your spending in to categories.  If you don’t have the figures easily accessible, consider a PFM (personal finance manager) that will categorise your spending and show how much you spent in each area over the last 3 or 12 months.  I use MoneyBrilliant for this.

#2 See what savings you can make this year.  Once you have your spending information, see where you can make cuts.  Can you spend less on groceries or eating out?  Can you pay less for insurances, get a discount on your home loan rate, and negotiate with your gas and electricity provider for a better rate?

#3 Kids activities and schooling costs.  Check kid’s uniforms, school fees and donations, and estimate the amount required for camps and excursions through the year.  It’s also a good time to rethink your kids’ activities.  Can they do activities more valuable for the money you are spending or the same activities for less?  Set a dollar limit for gifts for them and the birthday parties they’ll attend through the year.

#4 Have a goal.  Think about what you want to achieve with your money this year.  Do you want to take a holiday?  Save for a house deposit, a baby or a wedding?  Do you want to pay extra off your mortgage?  Think about how much money you will need to meet your financial goals.

#5 Write a budget. Take in to consideration your goals and commit to making adjustments to your spending to eke out the extra you need to put towards meeting them.

#6 Debt repayment & savings first.  Set up an automatic transfer from your transaction account to the debt or a savings account that is difficult to access.  If you have credit card or other unsecured debt repay that before saving!   Paying 20% interest on debt is crazy when you’re earning less than 3% on savings.

#7 Banking Structure.  Make sure your banking structure suits your financial goals.  For example, it’s great to have an account for spending, an accounts for bills & emergencies, and an additional account for savings.  Make sure that you find accounts with no or minimal fees to get the best value.  Savings are less accessible in an account without an ATM card that can only be transferred overnight.

#8 Credit Cards & Store cards.  You only need one!  Review your credit cards, annual fees, interest rates and choose the best deal.  If you have high balances, consider a balance transfer and work towards one card.

#9 Make new spending habits.  Going out to dinner?  Go BYO.  Purchase 2 take away coffees a day?  Switch to 1 strong one.  Learn to say no to spending opportunities.  Friends want to go out to brekkie?  Move it to a park with a BBQ and give the kids freedom to run & be noisy and save yourself some $$.  Put a spending limit on nights out.

 #10 Commit to checking in.  Once you’ve written a budget and agreed on your goal and any spending changes, set aside a time regularly to check in.  Life has the habit of sending us off track at times, and having a monthly catch up with your money will help you make adjustments to keep as close as possible to meeting your goals by the end of the year.

Related Articles –
New Years + New Goals = New Budget
How Money Brilliant makes saving money almost too easy
The 9 ways we saved in 2015

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Jen is an experienced banking professional who loves wine, coffee, finding a bargain and of course her three beautiful children. Since Jen's first budget led her to buy a home at 20, Jen has passionately helped others to make better decisions with their money.

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