Is this the year to get Family plc’s finances firmly under control?

Amidst the slew of gloomy post-Christmas financial stories, a tiny spark of light from M&S Bank.  This year, according to the bank’s Family Finance Index, more than half of all families (56 per cent) will set a household budget for 2014, compared with 46 per cent last year.

The number of people planning to review their finances as one of their New Year Resolutions is up too, although from a very low base; 19 per cent, up from 13 per cent.

Survey after survey has told us recently that large numbers of families are struggling by the end of the month.  M&S Bank says that almost four out of ten parents with children under 18 have less than £100 left in the bank at the end of the month, while Shelter reported that in London one in 13 people are worried that they won't be able to afford to pay the rent or mortgage at the end of January.

At the same time we are hearing that online spending broke all records over the holidays.

Tellingly, the M&S Bank survey suggested that nearly a third of parents didn’t know what the APR rate was on their credit card.  This is turn suggests that they don’t know how much their Christmas and New Year sales spending will cost them in interest payments if they don’t clear their account at the end of the month. 

Credit cards are fundamental to our financial lives these days.  We are using cash less and less often, and cheques hardly at all.  And for those who don’t pay off their credit card balance every month, this means that they are paying interest not just on the loans for the sofa and the car, but on every single payment they make, from the supermarket to the coffee shop.

The average family's finances are as complicated these days as a small business – and credit interest payments are knocking Family plc’s profitability on a daily basis.

So why do we pay so little attention to what we are actually doing with our credit card accounts?

And why don’t we take family book-keeping more seriously? Despite the complexities – the phone contracts that required two months’ notice for termination, the insurance rates which soar at the end of 12 months,  the strict terms and conditions which prove so costly if they are not adhered to – we try to manage our money in our heads.

There are online tools and apps a-plenty – try our Budget Planner here:

While you're going through your accounts you may just find some bills that can be reduced (or cancelled altogether); you’ll certainly be able to see exactly where all the money goes.

And hopefully next month the picture will seem a great deal clearer.

 For more on the M&S Bank survey, click here