Calling all moms: here’s why you need a Big-Ticket Family Plan

As every mother will tell you, motherhood is one never-ending juggling act. We toggle between looking after kids, work, dealing with the school runs and extra-murals, running the household and so much more - all while balancing our finances to the best of our ability.

Every good mother does their best to be present and provide for their family. And while providing for one’s family can take many forms – not solely monetary – there’s no denying that most moms selflessly strive to give their children the best they can afford – from their meals, to their schooling, clothing, extra-murals and everything in between.

But with so much on a mother’s plate, it can be difficult to know what to prioritise. Take out income cover, or put something away for your child’s education? Buy that new winter jacket your daughter has been lusting after, or start a rainy day fund?

Funanani Daba, one of Consult’s top performing financial advisers, a mother, a University of Pretoria BCom Accounting Sciences graduate, and holder of a UNISA post graduate Diploma in Accounting, admits that motherhood is many things all at once: challenging, rewarding, incredible, tiring and inspiring – but it’s hardly ever simple or clear cut.

“It’s important to be financially savvy and know how to prioritise your financial commitments – understanding the difference between wants and needs –? so that we can rise beyond financial difficulties and provide your children with the best you can.

With Mother’s Day upon us, Funanani provides a few tips specifically for mothers, on how they can prioritise their finances to the benefit of their families by creating a Big-Ticket Family Plan (BTFP).

1. Have a Big-Ticket Family Plan (BTFP)

What do you want for your family? You can’t get there if you don’t have a plan, and drawing up a Big-Ticket Family Plan will help you to clearly determine your financial goals and priorities. Write it down and be as detailed as possible – include everything that is most important to you to provide for your family, which money will be needed for. If married or in a relationship, involve your partner. This could include the health of your family ?(which would involve your grocery budget for nutritious foods and regular check-ups at the doctor), a good high school or college, a family home to live in – anything that will give your family your version of the best possible life.

?Next, work out a rough idea of what this will cost you, and then get to work and…

2. Draw up a budget

As simple as it sounds, a budget is critical for both future planning and managing your monthly income and expenditure. Many people overestimate the expenses that their income can handle, and this leads to debt. Setting up a realistic budget makes it possible to understand how much you have for the essentials, non-negotiables and savings, which will take you closer to your BTFP. Chat to a financial adviser who will help guide you in structuring and setting this up.

3. Cover your bases

While no one wants to think about it, life can sometimes throw us curve balls that have a way with interfering with our best-laid plans. This is where financial products such as medical aid, critical illness and income protection and life insurance come into play. Medical aid will cover expensive medical bills and doctor’s visits, while insurance products provide for your family should something happen to you or your partner that impacts your ability to earn an income and provide for your family. Think of it as a back-up plan for your Big-Ticket Family Plan.

4. Stagger your family’s expenses

Setting up a column on your budget for your children’s monthly expenses - and staggering what you need to buy them throughout the year - ?it possible to ensure that all their needs and wants are met, instead of trying to buy everything within a single month. Also, be clever about when you shop. For example, in November’s Black Friday sales, you might buy Christmas gifts or school items for the new year. Or you could buy clothes for next winter at the end of winter the current year, when all items are on sale – just make sure you go a size up! All of these savings add up and take you that much closer to your BTFP.

Also use your child’s school term calendar to track important dates, such as trips and other activities, so that you can budget beforehand for the month. Having to spend money unexpectedly can lead to you being out of pocket.

5. Build up an emergency fund

Your goal for your emergency fund should be to have three to six months of your basic living expenses saved up, which includes school fees, clothing, housing, food, etc. This means that in the event of an unfortunate occurrence such as retrenchment, you have a bit of a buffer to see you through.

6. Have savings for your family – and automate them

Having to manually make payments into various accounts can often make you think twice about saving a certain amount that you had originally planned on saving. The best way to ensure that you stick to your Big-Ticket savings goals – whether they be for your child’s education, a new house or a family holiday –? is to automate all your savings payments. This ensures you effectively ‘pay’ yourself and your family first – a tip recommended by wealthy people. By saving automatically and diligently, you create opportunity for these funds to build up over time, and for the true power of compound interest to take effect!

“As a mother, we always want what’s best for our children and want to provide them with a comfortable life. Having a BTFP will not only help you clearly define what is important to you when it comes to providing for your family, but it will also provide you with a tangible pathway to achieving these dreams,” says Funanani.