Family Finances in 2021

Every family thinks about their family finances and this past year has been a time when many people have struggled financially, but for others not being able to go anywhere or do anything has presented an opportunity to actually save some money.  For us as a family of 6 family finances and planning are so important as it is expensive running a large family.  We need to be prepared and plan ahead for those expected items so that we can handle the unexpected more easily.

I am not a great finance planner though I must admit.  I recently wrote about family budgeting, but our own family finances budget is woefully out of date at this point.  I have decided to get this all under control and review all of our expenditure and I have been looking at various online tools to help me get this task done.  So in this post I am sharing the tools that I have found useful whilst reviewing our family finances and some ideas that I have found to help us to save in the future and am keen to try. 

Hope it helps, but remember I share this as a mum and not as a financial expert so any recommendations I make come just from my experience of using them and should not be taken as financial advice.

Family Finances – Mortgage

Your mortgage is likely your biggest expenses every month and yet so often we all just lock into a deal and then stick with it.  How often do you review what you are paying and what the impact is on the overall amount you owe?  If you are like me then hardly ever… 

Overpaying

One thing I have been thinking about is how much difference even just the smallest overpayment could make to the length of time that we would have a mortgage for.  According to Money Saving Expert you can shave 2 years off the length of your mortgage and save around £4000 in interest payments just by paying an extra £50 per month.  This seems like a no brainer, but interestingly there are pros and cons for doing this around the amount of other debt you have and your current savings interest rate.   

I recommend checking out this article https://www.moneysavingexpert.com/mortgages/mortgages-vs-savings/  to find out everything you need to know about doing this and whether it is right for your family finances and situation.

Checking our current deal

Another way I am looking at our mortgage is through checking it against other possible deals to see if what we currently have is competitive.  There are loads of mortgage calculators out there which can be useful for seeing if you can afford that next property or how you could benefit (or not) from refinancing. 

One that I have found which is quite detailed is on Mortgage Calculators.  Lots of the calculators on this site are aimed at the US market, but there is a UK focused general mortgage calculator that, unlike many others I have used before, allows you to enter differing interest rates over time.

I really liked this element as quite often when we have looked at mortgages they do have different initial payments and interest rates which change then as you move through the payment schedule and it is useful to see what the impact of this will be on your family finances.  It is great for working out whether refinancing would be beneficial at some point in the life of your mortgage.

Shopping around when you come to the end of your current mortgage deal can really pay dividends – not all offers are equal and we have found in the past that staying with our existing mortgage provider was not the best option for us and ended up costing us more money than if we had moved. 

It can all be so complicated and hard to understand that I think research is needed whenever you consider changing a such a large financial element like your mortgage so if you are thinking about refinancing then I really recommend heading over to the Money Service website which offers free and impartial money advice.  I found this post about remortgaging super helpful for example:  https://www.mortgagecalculators.info/calc-uk.php

Taking advantage of no stamp duty

We would so love to do this.  Ideally we could do with a bigger house as the kids grow up and the no stamp duty offer up to £500,000 that looks like it will be extended next week would make a huge difference to us as a family, but we are also not really ready to move at the moment.  We need to know where our eldest will be going to secondary school really so maybe it isn’t going to be something we can take advantage of, but if you are thinking about moving 

Review Credit Card Debt

This is something that we have always done on a regular basis…  If we have any money on credit cards we would always review this regularly to check that we are still on a 0% interest rate and if not move the amount to another card.  

I think if you are going to use credit cards you need to be really disciplined about it.  A  positive and sensible way to use them is to make your purchases through the month on your card and then pay it off at the end of every month in full.  That way you get all the benefits of insurance and any loyalty usage deals for example using our tesco’s card gives points that we use every year to pay for our Eurotunnel crossing and our amazon card gives amazon vouchers whenever we use it.  This strategy can be risky if you don’t pay it off as it doesn’t take long to rack up credit card debt.

Advice and calculators for which cards are best, which offer great deals and what you can afford are also on Money Saving Expert

Savings Clubs

One thing I have seen lots of people talking about are Christmas Savings clubs and I like the idea of doing this in theory, but personally I am a little uncomfortable with the idea of handing my money over…  I am no expert, but here are a couple of articles I found interesting:

https://www.moneyadviceservice.org.uk/en/articles/christmas-savings-clubs-and-schemes

https://www.moneysavingexpert.com/family/christmas-savings-clubs/

As a family where we undertake contract based work January and February always suck a bit as we spend more over Christmas and get paid for fewer days so I am thinking what I really just need to do is work out what we spent last year on Christmas and save a bit every month in a separate account so that it is covered.  This will take some discipline though so we will see how successful I am 🙂

Review Energy Providers

Just like with the mortgage energy bills are essential and so expensive!  We try to regularly shop around and see who the cheapest provider is so that we are not being overcharged.  A family of 6 with a huge interest in IT and electronics use quite a bit of energy so we need to pay attention to this.  We like the Confused.com comparison tool:  Energy

Have a monthly Family Finances Budget and Plan

Once you used all the calculators and worked out what is best for your family finances a formal budget and plan is totally the right way to go.  I want to be honest with you all though – I may say this, but do I do it?  We often do a budget, but sticking to it and reviewing it is quite another matter.   I love this excel based budget from Money Expert – https://www.moneysavingexpert.com/banking/budget-planning/

I hope that this post has give you some ideas of where a bit of research and using free online tools can help you to review and keep an eye on your family finances for 2021.  Remember I am not a financial advisor and just write as a mum of a large family who likes to keep on top of finances.