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Managing money and avoiding debt

Understanding your family’s finances and managing money will help you avoid debt and stress, so that you can better enjoy your family life together.

Why managing your money is important

Getting expenses under control can help you avoid stress and improve your family’s lifestyle.

But it’s normal to feel overwhelmed by money worries and financial options. Most families have a lot of expenses, especially as children get older. And sometimes you might find all your bills coming in at once. It’s important to think carefully about how to cover your everyday expenses while planning for the future.

How to avoid debt

Here are some basic ideas for managing money and avoiding debt:

  • Follow the basic rule – spend less than you earn.
  • Decide what your priorities are, and it’ll be easier to control spending in the different areas of your family life.
  • Consider using an online budget planner.
  • If you’re worried about how to balance your family budget, try developing a basic plan for managing your money.
  • Reduce the number of bank accounts and loans you have so that your finances are easier to understand and control.
  • Check out your entitlements. For example, look into which government parenting payments you might be eligible for. Could you be getting more? 
Watch out for scams. Avoid signing up to anything you don’t understand, and always ask someone you trust for a second opinion. If it sounds too good to be true, it probably is.

If you get into debt

It’s important to identify why you might be in debt. This can help you plan strategies to get out of debt as quickly as possible. Start by asking yourself a few simple questions about your spending and income. For example:

  • What is your weekly or monthly family income?
  • What are your main weekly or monthly family expenses? For example, what do you spend on rent, loans, food and utilities?
  • How much of your weekly or monthly income do you spend on these expenses?
  • How often do you pay for each expense?
  • How many credit cards do you have? How much do you owe on each? How much do you pay off each month?

Answering these questions can help you to list all of your debts. Then you can focus on clearing one debt at a time. You might want to start with the smallest debt so that you gain confidence to tackle the bigger debts.

Taking steps to reduce debt will help you avoid stress. If you have a partner, reducing debt might also help you avoid arguments. 

If you find you’re not getting on top of things on your own, a financial adviser might be able to help you negotiate with debtors, explain options for dealing with outstanding bills, and work with you to create a manageable budget.

Australian Government help with debt

The Commonwealth Financial Counselling Program offers free financial counselling to individuals, families and small business operators who are experiencing financial difficulty because of unemployment, sickness, credit over-commitment and family breakdown.

You can also use the Australian Government’s Financial Information Service. This service is free and available to everybody. You don’t have to be receiving Centrelink payments to use it.

Video

Family financial management tips

8:15

In this video, financial expert Paul Clitheroe offers tips to help you handle the financial burden of raising children. The video also covers budgeting, planning, prioritising needs over wants, and making sacrifices to keep income greater than or equal to expenses.

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Last updated or reviewed
07-08-2018

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Raising Children Network is supported by the Australian Government. Member organisations are the Parenting Research Centre and the Murdoch Childrens Research Institute with The Royal Children’s Hospital Centre for Community Child Health.

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