Time For An Audit of the Family Finances

Using a Mac - Pikalily Blog

We’re at the time of year where we’re just past midpoint and closer to the end than the beginning and as many families are looking ahead to the upcoming holiday season, we thought it’s a good time to take a litmus test of the family finances. 

As much as this exercise doesn’t usually crack the top 100 list of “things I’m dying to do”, it’s time to dust off the calculator and give your finances a thorough shakedown.  Never fear, you’ll be back to familial bliss in no time.


OK, so there’s never going to be an exciting way to say the “A” word, but before you can even think about plotting the next phase of your family’s financial future, you have to know where you’re at, right now.  That means you need to take a dose of truth serum (and perhaps a glass of wine) and start at the very beginning.

The problem that most families face is that not everyone is a born financial whizz.  It’s not a skill that comes naturally to many people and this leads to a general lack of understanding of how to plan your finances and get the best out of what you have. 

Far too many opportunities are lost simply because we don’t always know how to turn money around or negotiate for the best possible deals on credit or mortgages. 

So it stands to reason then, that our first bit of advice for this post is this:  if you’re not one of those families that has an accountants soul, then it pays to get some good advice on how to do this and even if that means getting the help of a pro, the Pounds that you shell out now will be brought back in spades in the future if you get a handle on your cash flow management, savings and expenses now.

A good place to start though is to write down an honest account of all of your monthly outgoings and when we say all, we mean all.  That means your daily Starbucks, newspaper (if you still buy the paper kind), online subscriptions (if you don’t) and Itunes accounts. 

It seems silly but those “must-have” apps that only cost £5 a month don’t seem like much, but when you have ten of them, across 3 or even 4 devices – well, you get the picture.  No matter how trivial the amount may seem on its own, it goes on the list. 

We’re looking for a detailed picture of where you’re at and if you have teenage children, include them in the process.  It’s a great time for them to start learning about what makes a family tick.  You might think you don’t want them to know too much if your finances are anything less than stellar but this is the perfect time for some real-life lessons.

If you’re really committed to this process then you’ll take the credit card statements of everyone in your home and work through them together.  That seems a bit invasive, but it’s a wonderful exercise to see how much you’re spending on things you probably don’t need.

Once you’ve arrived at a thorough conclusion to your audit, you now repeat the process but this time considering all sources of income.  Subtract your expenses from your income and whatever amount shows on the calculator is a real-time result of what your month-to-month financial situation is. 

At this point, you may be tempted to give up but this is exactly what you don’t want to do because even if that number has a big fat “minus” in front of it, you can’t fix a problem until you know that there’s a problem. 

It is not a solution to hide your head in the sand thinking it’s going to go away, it isn’t and eventually – it’s going to get beyond repair and that’s when you’re in real trouble.


For many of us, we’ve already had to hit the reset button this past year.  Our friends at COVID-HQ made that decision for us but the lesson here should be that we shouldn’t have to wait for a pandemic of global proportions to get a handle on our family’s financial well-being. 

So whichever way you look at it, take the win.  If you fall into the “average” category when it comes to British families, then you’re likely at that point where you’re breaking even every month, with just a smidge over the “red line”. 

Don’t be fooled into thinking this means you’re financially healthy – it just means that you’re” cutting it” and that’s no way to secure a financially strong future.  If you are not saving at least between 10 and 15% of your monthly income after you’ve balanced the cheque book, you’re not saving nearly enough.

The average British family saves just £450 a month and while that’s certainly better than nothing, it’s not going to create a sufficient “safety net” much less a comfortable retirement for you and the pension fund you have at work, that isn’t going to cut it either. 

More pressure is being placed on pension funds now than ever in our countries history so you need to get good financial advice to make sure that you’re saving enough for your old age.


So now you know where you stand and armed with this knowledge you can start plotting your way out of debt and into financial freedom.  It’s easier than you think but that doesn’t mean it happens without effort. 

If you’re over-indebted the road ahead doesn’t have to be bleak but it is going to take commitment, consistency and compliance by everyone in your household.  Set goals that are timed at different phases throughout the next year and make sure that there are “rewards” for everyone when they’re achieved. 

Whether it’s a weekend away or a new gadget or two (as long as those rewards are not in turn funded by debt), your kids will soon come on board if they see the long-term value in what you’re doing.

If you’ve crunched the numbers and you’re just realised that you’re in real trouble, then it’s time you got some help.  Thankfully through the U.K. and Ireland, there are various mechanisms that the government has set up to help families that are in debt over their heads. 

You can consider debt counselling which is a process that allows for a restructure of your credit agreements and allows you to pay a smaller amount off every month but over a longer period.  Provided you keep to your agreements you could save your assets and once you’re debt-free, rehabilitate your credit profile.

Speaking of which, this is probably a good time to check your credit score.  If you’re doing well and have a top score, then you could qualify for better interest rates on your credit cards or loans and if your current creditors don’t want to budge then you could simply move your debt to new providers that will. 

If your credit score isn’t placing all that well, then you now have a good place from which to start rebuilding your credit. 


OK, now you know where you’re at.  You’ve made the tough choices and you’re looking ahead.  We all know that traditional forms of saving for the medium to long term simply don’t cut it anymore and you might be thinking about property as a way to create a “nest egg” for your future. 

This is never a bad idea but as with all big financial decisions, you should seek some advice before making any commitments.  But taking on a second property especially if you’re planning on renting that property out, is one of the best ways that you can create a solid financial base. 

If you can, always pay in a little extra over and above your rental income to cover your mortgage.  It’s quite amazing how quickly that payment period comes down and when you’re thinking about a “buy to let” property you want to make sure that the property you’re buying can earn sufficient rent to cover most of if not the entire mortgage payment.

To see what you could qualify for or to figure out what your monthly payments on a second property could be, try MortgageCalculator.UK.


It’s never going to be easy redirecting the flow of your family’s finances, especially if you’re in trouble but few things will leave you feeling as accomplished, as getting a handle on your spending and your debt. 

If you find that you can no longer afford the home you’re living in, but you don’t want to sell, consider renting a cheaper place for your family while you offer your house for rent. 

This could be a great way to save your home and when you’re ready to move back, someone else would have been paying your mortgage for you, and that’s kind of the point to all of this. 

It doesn’t all have to end with drama when some creative thinking and smart planning can go a long way to reimagining your family’s financial future.

This is not one of those cases where it’s better late than never, the best time is right now.  Good luck!

Until next time, thanks for reading.

Helen, Nial and Lewis.


Welcome to Pikalily, an award-winning food, travel and lifestyle blog. We are Nial and Helen, a happily married couple from Northern Ireland, who share a passion for food and travel among many things. We became parents to our beautiful boy Lewis in 2017. Follow our adventures through the blog.

Find me on: Web | Twitter | Facebook

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