Looking after your home and a family is a job it’s in own right. The household budget is something that is never far from your mind. It dictates so much of your family life. Every month you have to make sure you can pay the household bills. Also leaving enough money for the weekly shop. This is before you get the chance to work out if you can afford any treats that month. Needs normally overtake treats. Someone’s feet have grown or there is an unexpected bill for an upcoming school trip. It is all a juggle and I have to use an excel document to help me plan our finances.
My mum always told me to save for the things I wanted. I really wish I had listened to her life lesson from an earlier age! Saving for our wedding really kicked in my love for saving. I try to have a little amount in the bank for a rainy day but it isn’t always easy to accumulate that rainy day fund quickly.
Our Unexpected Purchase
Sometimes life throws you a curveball. Your washing machine or dishwasher might decide they have had enough and stop working. Your car might fail its MOT and need new parts. Or your boiler might need to be fixed to continue to heat up for home. Your rainy day fund might not be enough to help cover this unexpected purchase.
Last year we had to replace my computer. This was a purchase that really wasn’t in the household budget for the year. It wasn’t a new purchase that we could ignore as a computer is an essential piece of kit for my work life. Our rainy day fund wasn’t enough to cover the new purchase so we had to look into funding options.
Funding Options For Unexpected Purchases
Using A Credit Card – Credit cards are a form of pre-approved credit. Some people have them to hand for emergencies and they are good for covering online purchases. There are many different companies, like SoFi, that can provide you with a credit card. With credit cards, you only have to make a minimum payment each month. If you are making a bigger purchase this minimum payment may only end up covering the interest. It could take you years to clear debt like this. It will involve discipline to create and stick to your own payment plan.
Using an Overdraft – Overdraft’s are linked to your bank or building society account. You don’t have to make a minimum payment on these. Your monthly wages should clear what you owe on your overdraft. This will mean you have less money than you are used to having each month. Some accounts also charge fees alongside their interest rates for using this service. It’s another method that could possibly take a while to pay back. Like a credit card, you will have to have discipline with making your repayments.
A Bank Loan – With a bank loan you can borrow the amount needed over a set amount of time. You agree to pay a set payment amount each month. Having this structure to the payments can help you decide if the extra spending required can fit into your budget.
Independent Loan Companies – There are many independent loan companies on the market. If you like the idea of a bank loan but don’t want to be committed to a long payment plan an independent company might be right for you. North Cash will let you borrow smaller amounts of money over a shorter period of time. They have a minimum loan term of 3 months and a maximum term of 18 months.
Retailer Deals – Most retailers now offer credit services for bigger ticket items. At certain times of the year, you might even find they offer good deals for example 0% APR.
Finding the Right Funding Option for Your Family
As with all personal borrowing, you must make yourself aware of the APR (annual percentage rate) being offered to you. You must also keep up the contracted repayments as missing these will affect your credit score or worse. Borrowing responsibly is very important and you should make sure that the repayments fit into your monthly household budget.
DISCLOSURE – This is a collaborative post.