Four in 10 parents worry about lack of savings
Nearly four in ten parents (37%) with children under the age of 18 have less than £100 in their account at the end of the month, while 15% tend to be using their overdraft.
The same proportion (39%) are concerned about not having enough money put aside, according to the family finance index from M&S Bank.
However, on a more positive note, 91% were aware of exactly how much they have in their current account - but although 27% were aware there were current account charges they didn't know how much they were.
The M&S Bank research did find that financial planning is higher up on parents' list of priorities for 2014.
Over half (56%) of parents told the bank they will set a household budget for the year ahead, compared to 46% last year.
And nearly one in five (19%) parents are planning to review their finances as part of their New Year's resolutions for 2014 - this compares with just 13% in 2013.
When it comes to managing the household finances, more than a third (36%) of mums and dads are planning to share the responsibility between them. However, 30% of mums will check bank statements daily, compared to 22% of dads.
Of those who have money left at the end of the month, over a quarter (26%) plan to save it, with 30% of dads planning to save compared to 22% of mums.
Colin Kersley, chief executive of M&S Bank, said: "It's encouraging to see that parents are taking action to plan their finances for 2014 but to plan effectively families need to be aware of any interest or charges they are paying on their accounts. By understanding all of their outgoings, they can look forward to the new year on a sound financial footing."
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An overdraft is an agreement with your bank that authorises you to withdraw more funds from your account than you have deposited in it. Many banks charge for this privilege either as a fixed fee or charge interest on the money overdrawn at a special high rate. Some banks charge a fee and interest. And other banks offer a free overdraft but impose very high charges for exceeding the agreed limit of your overdraft.
An account opened with a clearing bank (few building societies offer current accounts) that provides the ability to draw cash (usually via a debit card) or cheques from the account. Some pay fairly minimal rates of interest if the account is in credit. Most current accounts insist your monthly income (salary or pension) is paid directly in each month and they offer a number of optional services – such as overdrafts and charge cards – which are negotiable but will incur fees.
Used by the holder to buy goods and services, credit cards also have a monthly or annual spending limit, which may be raised or lowered depending on the creditworthiness of the cardholder. But unlike charge cards, borrowers aren’t forced to pay the balance off in full every month and, as long as they make a stated minimum payment, can carry a balance from one month to the next, generating compound interest. As the issuing company is effectively giving you a short-term loan, most credit cards have variable and relatively high interest rates. Allowing the interest to compound for too long may result in dire financial straits.
This is used to compare interest rates for borrowing. It is the total (or “gross”) interest you’ll pay over the life of a loan, including charges and fees. For credit cards where interest is charged at more frequent intervals, the APR includes a “compounding” effect (paying interest on interest). So for a credit card charging 2% interest a month (equating to 24% a year), the APR would actually be 26.82%.