Managing the family’s finances can be a tough job, especially if you’ve had a change of income and are not both working full time anymore.
As a mother of three, local mum, Joanne Foltman has lived through the ups and downs of managing household finances, from working full time to being a stay-at-home mum, and now running her own business as a mortgage broker at Frangipani Finance.
In a role which gives her an insight into what people spend their money on, and experience with those who have an amazing ability to save and those that have not so great habits, she has put together some tips that you may find useful.
Budget and Track Your Spending
It all starts with a budget, yes you need to spend less than you earn. Most importantly, you need to understand your expenses and the best way to do this is to sit down and do a budget. You can speak with a financial advisor to set up your budget with the mindset of achieving longer-term financial goals, like saving for a mortgage or reaching financial independence. They’ll help you work out your spending patterns so you can come up with a robust budgeting plan to save more effectively. Or, you can start simple, and create a weekly or monthly rolling budget yourself. It doesn’t need to be complicated, here are some easy tips to get you started
- The old fashioned spreadsheet is always a winner, keep it simple. I have developed a great one over the years that I use myself and give to clients to help categorise expenses. Feel free to drop me an email to request a copy
- Your bank’s online banking tools may categorise your debits for you, so use this if available
- You can download all your expenses from your online banking, and these can be easily categorised from their description
- If you prefer something online, ASIC have a great budget tool
There are also a few apps that help you not only budget, but track your spend as well such as
- Trackmyspend by ASIC’s MoneySmart (it’s easy to use and free)
- Pocketbook – a great free app that syncs in with your bank accounts, making this process super easy
Review, Review, Review!
I am always reviewing my bills and ensuring I’m still on a good deal, which is one of the reasons I became a mortgage broker. I love shopping for a good deal! It’s a good idea to do one big annual review of everything in your budget or break it into smaller pieces and do a few things every few months, here’s some examples
- When the insurance is due, call up and ask for a discount or shop around for a cheaper deal
- Ask your provider if you will get a discount if you have multiple policies for insurance or phone plans.
- Have you removed maternity cover from your health insurance if you are no longer planning to have more children?
- Do you have an excess on your insurance policies? If you don’t claim often this may be a better option for you to reduce your premium
- Can you cancel any unused subscriptions you’re paying for? Do you really need Foxtel and Netflix and Stan?! Can you put your gym membership on hold if you’re not using it?
- So the list is endless…. Start thinking about where you can save money, all these little bits add up
Home loans
Your home loan is probably your biggest expense, if your interest rate doesn’t start with a number 3, then this is another way you could be saving money each month.
- Give me a shout to review your loan!
- Speak with your mortgage broker
- Call your bank and ask if they can reduce your rate
Credit Cards
Credit cards are an easy way for people to get out of control. If you don’t pay off your credit card each month in full, I suggest you re-think whether it’s right for you. Most people are paying around 20% in (compounding) interest, so it’s really hard to get on top of this if you keep adding to the bill each month.
- If your credit card balance is getting too big – stop using it. Have a really tight month to get back on track
- Reduce your credit limit
- Look into transferring your balances to an interest free credit card (make sure you cancel your old one)
- Consider consolidating your debts into your mortgage so you just have one payment at a lower interest rate (speak with a financial advisor or mortgage broker about this)
Allocate Your Budget
Creating additional bank accounts is a helpful, visual way to manage your budget.
Create different bank accounts for different types of spending, for example:
- Account 1 for bills
- Account 2 for savings
- Account 3 for general expenditure
- Account 4 for pocket money (this is great for anyone with a spending problem, too many shoes? This worked really well for my husband, as we discovered many years ago that if we allocated money to his own account each week for his spending, he wouldn’t get out of control. This covers coffees, lunches, beers at lunch on a Friday, etc… (he gets paid on a Thursday, so everyone is happy).
Keep on Top of Your Spend
And finally, the only real way to be on top of your finances is to be all over your spending – don’t hid from it! Check your bank accounts regularly, know what’s going on and where your money is going. You and your partner both need to be on board with this to make it work.
About the author:
Joanne is a mother of three and the founder of Frangipani Finance, providing comprehensive mortgage and finance solutions. She spent many years as a senior executive in equity markets in investment banking, but she now prefers helping others to get their finances sorted. She is passionate about helping people and in particular other women and being a trusted advisor that you can feel comfortable with.
