For many Australians, the current cost-of-living crisis means they are constantly keeping an eye on their finances. And, in particular, their cash flow.
Between forking out for rent or mortgage, petrol, groceries, electricity, household bills, and school fees, some families are increasingly living hand-to-mouth and struggling to make ends meet.
It is no surprise, then, that many look for ways to increase their cash flow, reduce their expenditure, and even seek a helping hand in the form of a loan or credit.
In this post, we’ll highlight some ways you can do all of these things to give your family a little more financial breathing room.
What is Family Cash Flow?
Family cash flow is a way to understand what money comes into your household and what goes out of it. The main purpose of it is to help you see spending patterns and understand why you might be short of money in some weeks or months.
When you have a clearer picture of your incomings and outgoings, you will find it easier to form a budget. This, in turn, will go a long way toward reducing your stress levels. It also helps them understand if they could do with a short-term injection of capital in the form of a loan.
Most of the major banks sanction loans to people with a good credit history. However, some other lenders assist those who need cash loans but have bad credit in Australia. That said, having a good handle on your family’s cash flow will improve your chances of being approved for a loan through them.
What is included in Family Cash Flow?
Essentially, family cash flow is split into two areas. In simple terms, this boils down to what money comes into the household and what money goes out of it.
In terms of incomings, this includes your income, childcare payments, family benefits, and any money you earn through extra work. Outgoings include groceries, fuel, school supplies, clothes, outings, medical costs, and anything else you spend money on.
When you understand this flow, you can start to more easily understand your financial situation.
Why You Need a Monthly Family Budget
Developing a monthly family budget can give you more structure in how you manage your household finances.
Perhaps the easiest way to do this is to create a spreadsheet. It doesn’t need to be complicated; just start by writing down all the income your family receives. This will give you an idea of how much money comes into the household every month.
Once you have done this, the next thing to do is list all your regular expenses. It might be helpful to break your spending into categories such as groceries, rent or mortgage, utilities, school fees, activities, and transport.
You may find it easier to choose a weekly or fortnightly plan if it matches your pay cycle. Otherwise, a monthly one should suffice. Ultimately, maintaining this simple plan will keep you aware of where your money goes each week and help you prevent overspending.
When developing your budget, it is always worth adding in a contingency. Unexpected costs often pop up, especially when you have kids. Therefore, setting aside even a small amount each week will help you build a buffer for when something needs fixing, replacing, or just paying for.
Smart Ways to Reduce Household Expenses
As well as trying to save money, it is always good to reduce your expenditure wherever possible. This doesn’t necessarily mean giving up the things you enjoy, but rather making small adjustments that can help you save money while keeping your routine the same.
Some good ways to reduce household expenses over the long term include:
- Buying groceries in bulk, and when they are on special offer.
- Using fuel apps such as the 7-Eleven app, where you can secure discounted petrol
- Regularly swapping insurance providers for those who offer cheaper rates.
- Cancelling subscriptions and streaming services you no longer use.
- Reducing the amount of coffee and takeaway meals you order
- Drinking less alcohol and smoking less
- Doing more free social activities as opposed to paid ones.
Individually, these might be small steps to take. But collectively, they could save your family a tidy sum of money on a weekly basis, which could ease the financial pressure that might be weighing you down.
If you have a newborn, here are some other ways you can save money.
Understanding Credit and How it Can Help Families
Credit can play a vital role in many families’ lives. Primarily, this is because it affects how easily you can borrow, apply for a credit card, or secure a rental home.
Essentially, the healthier your credit score, the more flexibility it can give you. That said, your credit score does change based on factors like your repayment history, whether you pay bills late, and how often you apply for credit. It is worth having a credit check performed to see what your current status is. Doing this will also provide you with the opportunity to see where you can improve it.
Tools and Apps to Help You Track Spending and Stay Organised
If you find that you are hemorrhaging money, there are several digital tools you can use to counter this. They enable you to track your spending, organise your bills, and even set reminders for payments to be made. The great thing about these tools is that they offer clear snapshots of where your money goes.
Where possible, it is a good idea to automate payments through direct debits, especially if they are made on the day after you get paid. This can help you reduce late fees and your temptation to spend money that should be allocated elsewhere.
- About the Author
- Latest Posts
