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Family Finance: Common Mistakes You Should Avoid During This Economic Recession

Family Finance: Common Mistakes You Should Avoid During This Economic Recession

Chiomah Momah

Money is often a big issue in most marriages and the current economic recession can make things even worse. To boost your family’s financial health in these difficult times, here are common finance mistakes most couples make that you need to tackle now…

1. Poor planning

It’s been said that when you fail to plan, then you plan to fail. Spending as you go can be downright reckless. Put your income to better use by planning how you both spend together. Start by drawing up a budget on a spreadsheet to enable you track your expected income against your planned expenditure. This will give you a clear perspective of your expenditure vis-a-vis your income.

2. Not disclosing each other’s income

Honesty is one of the major hallmarks of any good relationship. As a family, it’s important that full financial disclosure is made. Failure to disclose net worth can lead to conflicts arising from unrealistic expectations and deceit.

Sincere disclosure of your income, spending habits, financial commitments, and so on, will guide expectations and create room for better communication and financial planning.

READ ALSO: 7 Ways To Create A Budget That Really Works

3. Poor savings culture

Saving may hardly suffice in these hard times when income is even barely sufficient, however, even if it’s very little, as the name suggests, savings saves. Do not spend everything you earn, no matter how little.

Building a savings culture despite the odds will help you set aside money for the rainy day. So, take a look at your expenses and see what you can both strike out subsequently or spend less on to keep some money aside. Remember, little drops make a mighty ocean. Besides, it’s often a relief to know the family has some money kept away, even if it’s little.

4. Living like the Joneses

No thanks to social media, we are constantly shown the lifestyle of upwardly mobile families. From their lavish weddings to their over the top parties and luxurious vacations, who wouldn’t want to live the lifestyle of the rich and famous?

However, it’s best to resist the pressure and cut your coat according to your material. If you can afford to splurge, then by all means go ahead but whatever the case, DO NOT spend your life savings or borrow  just to impress the whole world.

Maintaining your savings, even if meagre, and avoiding the load of debt(s) trying to impress others may bring will take lots of financial stress off you in these difficult times.

READ ALSO: 8 Ways to Keep Your Family on a Budget During this Economic Recession

5. Being a freak for luxury labels

Your love for designers and other luxury items must be curbed, especially if you are struggling to keep up with your responsibilities already. Remember that you are not defined by labels, so save up and invest wisely for the future.

In fact, from daily household needs to clothings, and so on, try shopping for cheaper brands always to put some extra cash aside for pressing needs that may arise.

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6. Spending too much on your children

Now, I know that only the best will do for your little princess or prince but be wise. Resist the urge to grant every demand your children make especially when they are totally unnecessary. For example, why does each of your four children need their own game console? Not only will you be depriving them of the opportunity to learn how to share, you will also be spoiling them and wasting money that could be saved or put to better use.

The same goes for birthday celebrations. Don’t go borrowing to throw an impressive party. At the end of the day, what your children need from you the most is your presence not the presents. Also, curb extravagant handouts to dependants. In this hard times, there’s no need to create more financial stress for your family.

7. Making impulsive choices

There are always choices to be made. Choices such as where to live, children’s schools, number of domestic staff to employ, investment decisions, and so on. Making the wrong choices as a family may create huge holes in your pocket.

Whatever choices you make as a family this period, first discuss the financial pros and cons, and opt for what is truly affordable and won’t upset other important family needs and your savings.

SEE ALSO:MONEY TALKS: How To Raise A Prudent Child

8. Banker’s delight

Now is not the time to obtain a loan to acquire a new car or things that won’t bring in more money in the end. Try to live within your means, no matter how tough as a huge debt profile just adds unnecessary pressure and misery.

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