Families could feel child credit cap crunch

Finances can be stressful for families so planning is essential to weathering unexpected issues.

09:16 10 June 2013

Recent news is that the childcare benefit cuts would remain in the form of a cap. Those who make a certain amount of money or more would potentially not receive child benefits.

 

While some families may not fully need the money going forwards but have been receiving it, it will be an adjustment to do without the funds.

 

In some cases, this could be a fairly significant amount, and the trouble caused by such a decision depends upon whether or not families have chosen a lifestyle that requires all their finances.

 

Changes such as this one can crop up at any given time, so it is a good idea to have a plan of action. Being prepared beforehand can help you minimize the likelihood of a financial emergency. 

 

• Assess your family expenses and income for the past few months to get an accurate idea of your average costs. 

 

• If you already know the amount that will affect your finances, see if any changes are necessary. If you will be okay without changes, you may just need to make a conscious effort to reduce extra spending. 

 

• If the amount that could potentially be cut from your income, or be added to your expenses, is unknown merely lay out a plan of how you would be able to easily free up finances in the event of a problem. Having a plan means you will not panic if something happens, and you will have an idea of how much you will save by making a few modifications. 

 

• If you worry about the state of your finances a lot, or are concerned that you might end up with one household income at some point, the best bet is to take the smaller of the two incomes and tailor your budget around that one. You can gradually scale back so you get used to the new lifestyle.