How to create a financial plan for your family
While you can never be certain what the future holds, having a plan for your family finances could help give you peace of mind.
Planning your family finances can help you create the future you want. But it's often difficult to know where to start and what to focus on.
What to do if you’re worried about money
First off - if your money situation means you're more concerned with day-to-day finances, planning for the future might feel like a luxury. We get it.
If money worries are getting on top of you, the most important thing to do is to talk. Speak to your partner and if they’re old enough, your children, about the household finances.
Work out as a family where you could save money - even just switching off the lights when they leave a room could help - and discuss what you're hoping to be able to pay for in the future.
Having open conversations about money can also provide a valuable lesson for children in managing their own finances when they're older.
Our Supporting You section has advice on what to do if you’re struggling and details of where to go for help.
How to organise your finances
There’s no set way to create a financial plan. But it's helpful to consider:
- How you can pay off, or consolidate, debt to reduce how much it's costing you.
- Your goals and those of your family.
- What you’re currently spending.
- How much you can afford to save while still paying for essentials.
- What an achievable budget looks like for you.
How can you reduce the cost of debt?
If you’re paying interest on debt, getting this paid off is probably a high priority for you.
If you’re paying a higher rate of interest on debt than you would be getting on savings, you might choose to pay this off before you start building your savings to put yourself in a better financial position first.
This is easier said than done. But it could be worth making “pay off credit card” your goal for now and making sure you’re paying more than the interest each month to bring it down.
If you need debt advice, you can find a list of debt advice organisations on the gov.uk website.
What are your and your family's goals?
Having a goal in mind can help you focus on what’s important. This can help reduce the temptation to spend money on things you don't need.
Think about what you'd like for your children, if you have any. They might be too young to have their own goals but once they reach adulthood, a financial boost is bound to be useful – whether that’s to go towards higher education, setting up their own business, seeing the world or buying their own home.
Or you might simply want to build an emergency fund for future expenses.
What are you currently spending?
It can be daunting, but having a proper look at what you’re spending money on is the only way to work out where you can cut costs.
So, take a big breath and open your banking app.
There are plenty of budgeting apps out there that can help you see where your money is going. But, if you prefer, you could simply write down everything you’ve spent money on during each month and give it a category. For example, ‘groceries’, ‘clothes’, ‘bills’.
Add up the total you’ve spent and the total for each category.
You could also label each spend as either ‘essential’ or ‘not essential’. Heating bills and new school shoes are probably essential but, sadly, a Friday night takeaway maybe isn’t.
By labelling your spending like this, you’ll be able to quickly see how much your family spends on things that you don’t really need and will probably spot some areas where you could make savings.
How much can you afford to save while still paying for essentials?
Hopefully, looking at your spending will have given you an idea of where you can cut down. The next question is, what will you do with the money you’re saving?
This is where your goals come in. Let’s say you’re aiming to have a £5,000 emergency fund saved up within five years.
If you ignore interest rates and potential investment returns, you’d need to save £1,000 a year which is roughly £83 a month.
And when you factor in interest rates or potential investment returns, it may actually take you less than five years to reach £5,000.
It's important to understand that investing in stocks and shares has good long-term growth potential, but the value of your investments can go up or down and you could get back less money than you’ve put in.
If you're not sure whether to save or invest your money, we've written an article explaining the differences between saving and investing.
What does a realistic budget look like for you?
“Realistic” is the key word here. You might have big plans to reduce your spending and increase your saving, but if it’s not realistic then it just won’t work and might leave you wanting to give up.
First, write down everything you need to spend each month in as much detail as you can. Think about all the small things as well, like pet food or bus journeys.
It’s impossible to predict all expenses, so you might want to make “pots” of money available for certain things each month.
Then look at next month. Is there anything extra that you know you’ll need to spend money on, such as a birthday or a day out that’s already in the diary?
Hopefully, there’s enough left for saving, paying off debt and those non-essential expenses. Just make sure you know how much you’re putting towards each!
At the end of the month, check how you did. Matching your plan with your actual spending can help you see where things went wrong or right and where you can make changes to make next month a success.
Looking for a simple way to invest for your child's future?
With our stocks and shares Junior ISA (JISA) you can invest from just £10 per month up to a maximum of £9,000 each tax year on behalf of a child. Anyone can pay in, and the child will gain access to the account once they are 18 years old.

Junior ISA
Your children deserve a head start. Invest in their future with our Junior ISA.
Stocks and shares junior ISAs have good long-term growth potential, but the value of your investments can go up or down and your child could get back less money than you’ve put in.
You may also be interested in:
Should you charge your children rent?
Deciding whether to ask your children to pay rent or not depends on a number of factors.
Can pocket money teach children to budget?
Teach your children about financial responsibility by having them manage their own budget.
Is it better to save or invest your money?
Money that's saved grows by earning interest, whereas money invested increases (or decreases) depending on the value of stock market shares.
How to plan for long-term savings goals
Looking at the bigger picture can help you put together a plan to build the future you want.