Raising a family comes with a lot of moving parts, from juggling busy schedules, keeping up with work and school responsibilities and managing a household budget. If you’ve been trying to organize your family finances and be better prepared for the future, here are four tips for getting started.
Before you can create a plan for getting your finances in order, it’s helpful to identify your financial goals and an estimated timeline for each. For example, if you’d like to build an emergency fund, decide how much you want to save and by what date. You’ll then be able to structure your financial plan around these goals and make a roadmap for how to achieve them.
When it comes to family finances, your budget is a key player in good money management. By tracking your income and expenses, you gain a clear picture of what’s working, what’s not and if spending and income are out of balance. Plus, you’ll be able to use your budget to break down how much money is put toward your financial goals each month. Be sure to revisit your budget regularly and make adjustments as needed.
Along with automatic bill pay, there are other ways to automate your finances and help increase the chance of reaching your goals successfully. Perhaps you want to eliminate credit card debt, save for a vacation or create a rainy day fund. Using your budget, decide how much income could be designated to your goal and then automatically move that amount to a separate account each month. Since money is already routed to different goals, there’s less risk of spending it on non-essentials.
Money management should be a family affair, because discussing financial topics and healthy habits helps everyone build their knowledge and work toward common goals together. Encourage open discussions about spending, budgeting, debt and saving for the future. If you have a family goal, like taking a trip, discuss ways the group can cut costs and put more money toward that goal. When you hit your target, you’ll all be excited to celebrate the accomplishment and apply the same strategy down the road.
