Family Money Management Tips

03
April

Few families can honestly say that they have an adequate emergency fund filled with savings that could support their current lifestyle for a minimum of 3-6 months. With today’s uncertain economic times, managing money has become very important and could very well make the difference between losing the family home and being able to weather a financial hurdle successfully. In order to make sure enough money is being saved and then properly invested, consumers need to learn several key tips.

Plenty of families spend money on entertainment and dining out without truly realizing the actual cost every month. The same concept holds true with multiple other areas that lead to potentially high expenses, such as cable television and high speed internet packages. A budget is only going to be successful if the entire family will attempt to stick to it and reduce spending. A common goal must be formulated and it is important for the whole family to understand why it is so important to save and invest money. Discussing budgets and savings strategies can be an excellent way to teach children about money and the importance of saving and living within means.

Nobody is suggesting that families refuse to participate in activities together, but enjoying a public park can be a replacement for a trip to the amusement park that will cost hundreds of dollars. Future goals should be established and only if they are met should rewards be issued. Some financial advisors suggest putting $1 into a special fund for every $5 that is placed in savings. The special fund can be used for vacations, family outings, and other desires. While it may not seem to be an effective method to some people, it certainly forces a pretty strong amount of savings to accumulate.

All family members must understand that there are certain sacrifices that may have to be made, and it is important to track all expenses as they occur. Few people know how much they spend on miscellaneous items that all can add up to very large amounts. Each member of the family should write down all of their expenses for a 30 day period. The results are sure to amaze and will hopefully lead to reduced bills and better cash flow.

Most people believe that the best time to invest is after a substantial amount of money has accumulated in a typical bank account, but the simple fact of the matter is that it is never too early to properly handle savings. While it is necessary to keep a portion of the cash liquid, meaning that it can be accessed immediately without having to sell assets, it simply doesn’t make sense to store the money in a location that will not enable it to earn interest. An appropriate investing strategy must include bank accounts that are designed for daily money management, certificates of deposit for short-term savings, and other investments for longer term goals such as retirement. The most critical step of the investment portion of effective money management is selecting and receiving advice from a qualified representative. The professional advice should be followed and can help turn a small amount of savings into a nest egg that the whole family can be proud of.

Families must also invest for specific purposes and goals, and many of these require advanced planning. Saving for retirement is much easier if it is started as soon as possible, and it unfortunately gets placed on the back burner by many individuals. Education and college expenses can also pose significant hurdles and issues that must be resolved, as can unexpected bills and emergencies. Even purchases that a family can look forward to, such as a house or car, can cause a wrinkle in the budget. Having a suitable investment strategy will alleviate some of the stress involved with handling these types of speed bumps in life.

In order to be successful, the entire family must be dedicated to the money management strategy that they have adopted. A united effort certainly stands a much better chance than all members of the family doing their own thing. The lessons that can be passed on to children and teenagers will serve them well when they begin to make their own decisions regarding money.

This post was written by

jason – who has written posts on Budget Clowns.
Father of three and married to a lovely women. Always looking for ways to save money, and invest it properly for my children's future.

Email  • Google + • Twitter

Comments are closed.