It can often feel like we never have enough money to be able to afford to pay for everything that we need. We might be struggling to pay for everything, having to borrow money or digging into our savings account all of the time. You may be worried that you cannot continue like this for much longer and you will probably be right. It is wise, if you are in this situation, to try to break the cycle and make sure that you are able to afford everything that you need. There are many things that you can try and changes you can make, but it can be worth just asking yourself a series of questions to get you started.
- Do I really need it? – whenever we are about to buy something it is wise to ask ourselves whether we really need that item. It is easy to think that we do need everything that we buy but it is actually very likely that we do not need everything, even though we may really want it. Our needs are very different to our wants and if we just cover our basic needs, then most of us would have enough money to manage. However, this is not an ideal situation for most people but if you start by covering your needs first and then use the money you have left to buy some of the things that you want, you will still be able to have some treats but you will also make sure that you are balancing your budget better. You may need to spend some time actually thinking about what is a need and what is a want. For example, you need to pay rent or mortgage, loan repayments, insurance, tax, transport, basic clothing, basic food, contracts and things like this. However, entertainment, alcohol, holidays, gifts, homewares and things like this could usually be classed as luxuries and are not necessary and this is the area where you are likely to be able to cut down.
- Can I get it cheaper? – it is also worth making sure that you are not paying more than necessary for the things that you are buying. Compare prices and think about whether you would rather buy alternative brands or shop in different places so that you can save money. Comparing prices is easy online these days as there are comparison websites for everything from utilities and insurance to supermarkets. Although they will not include all retailers or providers, they will at least give you an idea of whether you are paying more the necessary. It is important to make sure that you are getting good value for money; you do not want to be buying items that are unnecessarily expensive but also you do not want items that will not last long and you have to replace because the quality is not very good. So, it could be a matter of looking at what is available, comparing prices and reading reviews to decide whether it is better to switch to cheaper things or not.
- Can I wait before buying it? – another thing to consider is whether to delay buying something. There are two main advantages to doing this. Firstly, you will be able to spend some time thinking about the purchase and deciding whether you really need it. Sometimes we buy something and then regret our decision, perhaps because we wish we had the money to spend on something else or because what we bought was not as good as we had imagined. Secondly you will be able take time to save up a bit of money or pay off some of your loans first. By not buying everything as soon as we see it, we give our finances a bit of breathing space. By delaying we may also find that the item will be reduced in a sale and we can get it cheaper once we decide that we really do want it.
- Can I earn more? – it can also be worth seeing if there are ways that we can earn more. This can help in all sorts of ways. You might be able to sell things, do some temporary work or some overtime. This will bring in lump sums of money which could help you in the short term. However, you might be wiser to focus on more long-term solutions such as finding a better paid job or a second job or something like that. If you are struggling to make ends meet each month, then a lump sum of money will be useful only for a while, whereas if you want to repay a loan, then it could be handier. Consider what you are trying to achieve and try to find an appropriate solution for your needs.
If you have children then you will obviously want to do everything that you can to help them. When it comes to finances, this is no exception. It is every parent’s wish that their children are happy and so if they are struggling financially, then this can make parents unhappy as well. Fortunately, there are lots of things that parents can do to help their children and they do not all involve giving them money. Many parents do not have money to give to their children, so it is good to know that there are other solutions that could help them.
- Set a good example – children learn a lot by following their parent’s example and so if parents make sure that they are setting a good example then this will rub off on their children. This can include things like making sure bills are paid on time ensuring you always live within your means, making sure there is enough money to cover all of the essentials. There may be times when this is not possible, but if this is the case make sure that you get the children involved by explaining to them why things are difficult and what you are going to do to reverse that situation. You could have made a mistake by not budgeting properly or something like that and if this is the case tell them about it so that they learn form your mistake.
- Give them advice – sometimes children want to be independent and are not interested in the advice that parents give them. However, this is no reason not to give them any. The things you say will rub off on them and even if they do not want to hear it they may just sink in. Hopefully they will be interested in what you have to say. You do need to make sure though that you are not judgemental as that will turn them away from what you are saying but just try to be understanding but helpful as well. You may have been in the situation as well and so might be able to explain how you managed it. Make sure that they know that you will always be there to help them out if they are making financial decisions or need help.
- Be a guarantor – there are some loans where someone can borrow even if they have a poor credit record as long as they have a guarantor. This can be something that a aren’t might do for their child. What happens is that if the child cannot cover a repayment then the guarantor will pay it instead. Some parents like to help with this if they cannot afford to lend them the money themselves and would like to allow the child to have the money that the need to buy things. It is worth noting though that this type of loan can be expensive compared with other types of lending and so financially they might be better off trying for a different type of loan altogether, if that is an option for them. There are other situations where a parent could be a guarantor as well which could be useful, such as when their child rents a house for the first time and perhaps has not been in a job for long and so does not have a good credit record. This can really help the child to start to build up a good credit score as they have a chance to prove that they can manage financially, assuming of course, that they are able to manage.
- Lend them money – some parents choose to lend money to their children to help them out. They might let them have it interest free or at a very low interest rate and have flexible repayment terms. This can feel great, as a parent, because if you cannot afford to give them the money as you need it for the future, it means that you can help them out just for a while. However, you do need to be careful as it could cause jealousy from other siblings and it could mean that there is trouble caused in their relationships with each other and yours with them. Some parents might just prefer to give their children money to help them out and perhaps try to make it fair by giving each child the same amount. This should help get around any jealousy problems but it could still not be the best solution. This is because if your children get to rely on you helping them out when they get into financial trouble, they may not try hard to stay out of trouble, but feel that it will be okay to not budget carefully or save up because they can ask you whenever they need financial help.