If this is your approach and you’ve not run into any problems as yet, consider yourself very lucky, but yeah, most people sort of just wing it when it comes to the family finances. They sort of just let things play themselves out and then fall into a financial system which often luckily works for those who manage to make more money than what their expenses require of them.
You can only survive by the skin of your teeth for so long though. At some point in time there’s going to have to be some sort of structure to the manner in which you approach your finances. You could otherwise be sitting on a ticking time-bomb without even knowing it. Something else which could prematurely set this ticking time-bomb off could be a financial emergency which can present itself in any number of ways, be it a family member falling seriously ill and requiring expensive medical treatment or even a series of unfortunate events which would leave you having to replace a lot of your valuable assets.
So it’s imperative to have a plan. You need to figure a few things out, set some financial goals and work towards achieving them by structuring your daily finances accordingly.
Savings are extremely important and are often overlooked when things go along rather swimmingly without much incident. There are some big things in every family’s life which they need to save for, be it a house they can one day call a home they own outright or some assets with which they can generate a passive income, perhaps during the main breadwinners’ retirement years. Savings for rainy days are even more important and the general rule of thumb is that you should have enough put away to sustain three consecutive months of not being able to earn an income.
Compounded interest works best as perhaps the lowest risk option of growing your savings, which is probably available from the bank you already use.
Budgets are extremely important as part of the financial considerations of any family seeking to enjoy a good quality of life. Many people just don’t draw up budgets, the simplest of which can go a long way in helping you better manage your personal finances. When you have in front of you some facts and figures in black and white about just what you’re spending your money on and how much income you get (real income, i.e. less deductions, taxes, bank fees, etc.), it becomes that much easier to spot those areas in the management of your finances where some simple yet very effective improvements can be made.
Something as simple as say buying your groceries as locally as you possibly can adds to the quality of your life in more ways than one, such as ensuring you get the freshest produce at a lower price and perhaps spend less on associated expenses such as fuel.
Winging it has to stop at some point and once you actually sit down and get the full measure of the manner in which you handle your finances, you may just rue all those times you’ve wasted money unnecessarily.