Understanding your family's finances

by Leeds Building Society

Getting to grips with your family's finances

Looking after your family's finances can seem like an overwhelming task. With different incomes and outgoings to keep track of, making the numbers add up can seem tricky. To help you stay on top of your money we’ve put together four handy tips.

Look after the day to day costs

As the saying goes, look after the pennies and the pounds will look after themselves, and this can be true of day to day expenses. Whilst it might not be pennies, the cost of your daily morning coffee or bus to work can soon add up. When you’re looking after your family’s finances, understanding the extra day-to-day costs will help you to plan your spending.

Plan ahead for life’s big events

Whether it’s a new baby, a wedding or for your retirement, planning ahead will help you be financially ready for the changes life can bring. Sit down and think about what you want for your future. You’ll then be able to put a plan in place to help you get there.

Make the most of your savings

There a number of savings accounts available and which one you choose will depend on your needs. Before selecting an account, you should ask yourself;

  • How much do you want to save?
  • How often will I need to access my savings?
  • How do I want to manage my account?

A tax-free cash ISA§ is a great way to see your savings grow as any interest earned will not be taxed.

Usually any interest earned on your savings is taxed, unless you are a non-taxpayer. This means that if you pay income tax at a rate of 20% you’ll usually be taxed 20p for every £1 you earn in savings interest. Putting your savings in to an ISA means you’ll keep the full £1 instead of just 80p.

For the 2017/18 financial tax year you can save up to £20,000 tax-free.

Create a budget that works for you

A budget will help you prioritise your spending to make sure that essential costs, such as mortgage payments or food bills are covered. You can create a budget on a weekly or monthly basis, depending on what suits you. To create a budget you should list all the money you have coming in (your income, as well as any benefits or savings interest) and all your outgoings (mortgage, bills, food and travel costs). This will show you how much you have left over to put in to your savings or have extra to spend.

There are a number of online tools you can use to help create a budget, but writing it all down on a piece of paper is just as effective. The Money Advice Service have a number of budgeting tools on their website.

 

This guide is intended as a summary only and does not constitute legal advice given by Leeds Building Society. No reliance should be placed on this guide and you must make your own decisions, we recommend that you seek legal and/or financial advice if you have any questions or queries.

§ Tax-free means that interest payable is exempt from income tax. Cash ISAs are available to individuals aged 16 and over who are resident in the UK for tax purposes.