As of early 2018, the latest numbers show that 8.3 million UK families are living in debt. Additionally, the Independent reported that over 40% of Britons have problems with making their financial ends meet. While keeping your family happy and healthy is a top priority of almost every parent, financial woes can quickly cause an imbalance and struggles. From getting a car loan to a mortgage loan, strong credit and overall finances are needed to help provide the necessary items for your family. What should you do if you find yourself in the midst of financial challenges? Learn more about top expert tips for turning your family’s financial picture around quickly.
Clean up your financial record as soon as possible
The latest data from this year shows that the UK’s average credit score has risen from 346 to 380 over the past year. This average rating is considered to be in the “fair” category, which is far from what is needed to get the best rates on loans. In some cases, it isn’t even enough to qualify for the credit you need. Whether you have experienced negative financial reporting in the past, or have recently made late payments, you have the power to turn your credit score around. What is the best way to do so? Experts recommend checking your credit report for mistakes (and disputing any errors), holding off on applying for any new credit, making payments on time, and paying your debt well below your limits.
Create a savings and a budget
As you work to repair your credit, it is also crucial to create savings and a weekly or monthly budget for your family. Why are both of these items so important? First, having a savings (even a modest savings of £500-£700) can help protect your family from future emergency expenses. It can also greatly reduce your risk of having to use credit should an emergency situation arise. Whether an appliance in your home breaks or your car needs urgent repairs, having some kind of savings is important. Also, creating a budget for your family helps you better understand where your money is going. Rather than being restrictive, budgeting for your needs empowers you with the ultimate control over your finances.
Teach your children proper personal finance habits
In addition to taking care of your personal financial challenges, it is crucial to set your children up for future financial success. Even if your finances are messy at the moment, there is nothing stopping you from teaching your children proper money habits. Explain how to set a budget, how to divide up any money they earn for needs, wants, and giving, and discuss the dangers of misusing credit.
No matter where your family’s finances stand at the moment, you can always turn your situation around. Proper money management begins with restoring your credit, creating savings, budgeting, and teaching your children about personal finance.