Category: Budgeting

Is it Worth Saving up for a Family?

If you are thinking of starting a family or feel that there is a chance that you will have one in the future then you may wonder whether it is a good idea to save up some money towards it. This is something that some people do but others do not and you may wonder whether it is a good idea for you to do.

Advantages of Saving Up

  • Saving up money can be really handy in lots of situations. Having a bit of money to fall back on can be really useful and it is a good feeling to know that it is there when you need it. Even if you do not end up having a family, having the money there will always be handy.
  • When you have a family there will be a lot of extra expenses. Not only will you need to buy lots of things but one of you may need to give up work or you may need to pay for childcare and you will need to find the money for this as well.
  • Once you have a family it will be much more difficult to save up. So even if you manage to pay for everything you need once you have a family, you will possibly not have the opportunity to have any extra money to put aside. It is always nice to have a bit of money behind you, in case you need to buy something in an emergency or you lose your job and need some money to live off.

There are good things and bad things about saving up.

Disadvantages of Saving Up

  • If you have any debt, then it could be better to repay this rather than save money. This is because you will be paying interest on the debt. This can add up to a lot of money and so it is worth thinking about whether paying this off first might be a good idea. It is good to think about how much the loan will cost and how much interest you make on the savings and which will be better to do. Calculate the cost of the loan in total and think about how much money you will save if you pay it off, you can ask the lender how much the costs will be if you are not sure. You will also need to check whether there are any fees for repaying the loan early. Sometimes there can be a significant cost and sometimes just a small one or nothing at all such as these instant loans and it is well worth checking this out.
  • Sometimes it might be a good idea to buy items rather than save up. Not only can this help your local economy if you shop locally or the economy as a whole, but it can also allow you to build up your home before you have a family. So, if you buy white goods, furniture, decorate it or even get a mortgage and buy your own place, this will mean that you are all set up for when you have a family. Hopefully you will not need to replace these items while the family are growing up and try to find the money then.
  • Savings tend not to attract very much interest. This means that you will have money sitting in the bank possibly decreasing in value as it is possible that inflation may be higher than the interest rate. However, you may be able to find a better rate of interest if you use a notice account of fixed rate bond, so it can be worth looking out for those to see if they are worth using.

How to Stay Motivated when Budgeting

If you are trying to stick to a specific budget, for any reason, then you can find that to start with it can be fairly easy. However, you may find that after a while it begins to feel rather tedious. The different things you have to do, such as always checking prices, spending as little as possible, looking for extra earning opportunities and things like this. It is important to make sure that you stay on track though and there are things that you can do to help. There are  few ideas below so think about whether to try some or all of them to help.

Have Your Goals Written Down

It is really important to write down your goals. This allows you to focus better on them and there is statistical evidence to show that if a goal us written down it is more likely to be achieved. However, as well as just writing down the goal it is important to write down why you want to achieve this and what you will get from it. For example, just writing down ‘stick to my budget’ is not as useful as ‘If I stick to my budget for 2 years, I will save enough money for a holiday in America’. Then you can see the reasoning and it reminds you of why you are doing it.

Look at the Twice Daily

It is good to go a bit further with this as well and look at the goal really frequently. Stick it up on the bathroom mirror or somewhere you look at the beginning and end of the day. Try to imagine what it will feel like when you actually achieve the goal. So, if you want a holiday, imagine getting on that plane and how exciting it will be and this will help your enthusiasm for sticking to your budget. This should spur you on each morning and make the decision making and cutting back that you may have to do that day feel a lot more worthwhile.

Treat Yourself Occasionally

It might be the case that you will feel the need for the occasional splurge. Think about this carefully and plan it. Do not just go out and buy something big but maybe plan a certain amount of spending each week or month and take time to decide what you would like to spend it on. You might be able to find  way to have a treat that does not cost any money as well and this could be even better, but this will obviously depend on what you like as a treat.

Tell Friends and Family

It can be wise to let people you know that you are on a tight budget. Just let them know that you are saving for a holiday or whatever and they will hopefully understand that you may not be able to pay out as much money a usual. Therefore, you may not be able to buy as many gifts, go out as often, entertain so much and generally not be as extravagant as perhaps you were previously. It might also be wise to tell work colleagues as you might need to stop going on work nights out, playing in the lottery syndicate, buying a round of coffees as you will have to bring in your own etc. It might feel a bit embarrassing to start with to tell people that you are trying to budget, but you will probably find that there are lots of people that also need to do it. They might think that it is a good idea and decide to do the same thing themselves.