Money matters for frugal moms

Key takeaways

Responsible parenting includes providing financial stability Making SMART goals can help you steer your family away from financial insecurity. Considering long-term investment can secure your child's future

Mothers play an irreplaceable part in our lives. They address everything from our mental and physical needs to matters of the heart. The first to rise, the last in bed, without them, we’d be lost. However, apart from the myriad of responsibilities they fulfil, managing family finances can be a tricky subject to navigate, especially for new mothers.

Assuming the role of the family's financial gatekeeper is no easy task by any means. It requires clarity, restraint, and adaptive thinking to ensure that needs are met with sustainable growth in sight.

Let's consider a few practical strategies for smart spending and saving -

Family finance is a family matter

Creating an effective financial framework for your family is not a one-person job and requires all hands on deck. Speaking to your husband and setting ground rules beforehand is an exercise stemming from wisdom. Maintaining an open line of communication for money matters with your partner displays maturity and prevents disharmony at home.

Similarly, helping children develop a healthy understanding of money and teaching them to use it responsibly will equip them to be sensible with family funds and their earnings. Introducing a simple piggy bank can act as an instrument for learning the importance of saving and money management.

Budgeting helps save

Every mother knows her family's needs and desires. Differentiating between wants and needs will help you allocate funds more effectively. Recurring bills like rent, food, utilities, education, and travel cannot be ignored and take precedence over everything else.

Wants could include luxuries and privileges like entertainment, gadgets, vacations, eating out, and so on. Creating a document in which you pen down your family's needs and wants in separate columns will help you visualise your priorities and identify potential areas to save in.

When compared to the collective family income, your list of wants and needs will help you make financial decisions without hesitation.

Collective goal setting

Parents have a list of goals they want to achieve. This could be your child's education in a specific college, buying or renovating your home, or even clearing debt. As the financial controller of your household, it is important for you to consider the collective aspirations of your family. Setting milestones in place will help you create a roadmap that aligns with all members, making it an inclusive exercise.

Healthy financial goals are achieved with meticulous planning and prudent investment choices. Similarly, effective goal setting requires continual realignment based on changing circumstances like job loss.

Use the SMART (Specific, Measurable, Achievable, Realistic) methodology to evaluate your goals and set real expectations. This exercise will provide you with a sense of direction as well as improve self-discipline.

Invest for the future

Mothers know best and want what's best for their families. Therefore it's important to understand that securing financial stability is a long-term endeavour and making the right investments can steer your family towards a bright future.

Consider investment options like the following:

Sukanya Samriddhi Yojana

Specifically for daughters under 10 years of age, SSY is a government back deposit scheme which allows you to start investing with a meagre amount of Rs. 250. The maturity period for the scheme is 21 years.

Gold ETF

Gold exchange-traded funds (ETF) enable you to invest in gold. Here, you won't physically possess the precious metal, but rather its value in money which is held in an account. Gold ETF offers you the freedom to invest as little as 1 gram of gold whenever your budget permits.

PPF

This is not a well-known fact but parents are able to open minor public provident fund accounts for their children with a small investment of Rs. 500. The lock-in period for PPF is 15 years and is also eligible for tax deductions.

Seek financial counselling

Approaching an advisor could be the best move you can make to improve the financial standing of your family. Certified advisors can help you plan for financial success by addressing debt management, saving, budgeting and investments. Moreover, by working with an advisor, families will be held accountable for their financial actions resulting in increased discipline.

Conclusion

Saving money, making the right investments and steering your family away from the financial doldrums is a full-time endeavour. Implementing these practical approaches and suggestions will help frugal mothers positively impact their family's financial well-being.