Creating and managing a budget is hard enough on your own, but when you are managing a whole family, it becomes much more difficult. Luckily, there are many things you can do to better manage your budget and set yourself (and your family) up for financial success!
Keep reading to learn some of the most common budgeting mistakes families make and how you can avoid them!
1. Having a house that is too big
It’s understandable that you want to have your large dream house that has multiple spacious rooms and luxurious toilets, especially if you have a big family. However, having too much extra space is potentially a lot of wasted money! Families with an average family size of 4-5 members can save a lot by downsizing to a more reasonably-sized house. For instance, the kids can share bedrooms especially if they are of the same gender.
2. Saving for too many goals
Having goals is definitely important, but having too many goals at the same time can cause you to spread yourself too thin! It is likely that saving for too many goals becomes unachievable as well, especially if your monthly earnings cannot accommodate all those goals.
Over time, the mere responsibility of having to achieve those unrealistic goals will overwhelm you and cause a dip in your morale, which is counterproductive and sets you back from taking proactive steps towards success. You would then have to restart the process of getting motivation and then re-planning your goals and strategies.
To avoid this pitfall, it would be more practical to have a few realistic goals and add more goals as you achieve them because your cash can only go so far!
3. Having too many money accounts
Having multiple credit cards, debit cards, checking accounts, etc. makes it easy to lose track of your spending, because it is extremely difficult to manage multiple, cluttered accounts. This is especially relevant to Singaporeans, who oftentimes have multiple cards and payment wallets like ShopeePay, GrabPay, PayNow, JiPay, FavePay, etc.
To avoid such messes, try to streamline all of your financial accounts using only one account that serves multiple purposes, like payments, expense tracking, money transfers (local and international), etc. This will give you a holistic view of all your assets and spending, and make life easier for you as everything that is expense-related is centralized and easily accessible!
4. Not checking your spending consistently
It is very tempting to stay in the dark regarding your finances when you have a feeling that you have been spending too much. The idea of checking when you are under stress can cause a great sense of anxiety. However, avoiding checking your bank account out of fear only gets worse with time, so it’s better to just rip the bandaid off and check!
Facing the realities of your spending habits is the first step to helping you identify problem areas in your expenses. It is only after this crucial step that you can start organizing your expenses based on wants and needs and then budgeting for those accordingly. So take a deep breath and open up your bank balance sheet!
Excessive spending can happen when you least expect it. When you buy a $10 item one day, a $12 lunch the next, and a $5 coffee later, those expenses add up quickly! Start monitoring your spending by making conscious choices and avoid spending money when you don’t need something. You can use money budgeting apps like JiPay to help you visualize your spending patterns.
6. Not Preparing for the Future
Even if you have a clearly defined budget, it doesn’t always account for unexpected costs. For example, accidents, illnesses, or theft are things that could happen at any time. That’s why it is always necessary to have a considerable amount of savings. Sometimes it is inevitable that you will have to dip into your savings a little to ensure maximum protection for you and your family. The idea of paying for insurance monthly might sound painful for some, but it pays in the long term when such unfortunate circumstances occur. These situations can occur to anyone at any time, so always be prepared financially!
The good news about insurance is that many use it as a savings plan and actually earn bigger returns after a long period of time. So speak to a financial advisor soon and start budgeting for insurance!
7. Doing it all alone
If you are the only one on board to improve your financial situation, it can become overwhelming, so get your family involved! This is especially important if you have multiple spenders to manage.
If your kids don’t already have the JiPay Family/Orange card, then order the card for free today! The JiPay Family card is a money app for kids that also acts as a great opportunity for you to teach your children the importance of finance management. You can talk to your spouse and children about money to get them involved in the budget creation process.
JiPay is an e-wallet, prepaid MasterCard, and money management app that serves parents, employers, migrant workers, and kids in Singapore. On JiPay, you can view every expense, which is especially useful for families that are managing multiple spenders. It is the best expense tracker for kids and employers who want to save money in Singapore.
You also have an “Insights'' tab, which displays your spending habits, so that you can know exactly how much you are spending on what. The JiPay app also helps you with budgeting your money, since you cannot spend more than you top-up!