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If there’s anything more challenging than managing a family, it’s managing finances. The financial world can be confusing and difficult to navigate, and with family finance there’s always added pressure to succeed. Whether you’re looking to clean up your finances or you’re starting to plan for your family’s future, we’ve got you covered with four tips for taking care of your family financial matters.
Communicate With Your Spouse
Finances can be a taboo subject for some families. It can lead to parents feeling stressed and overwhelmed, and money can even be a common catalyst for arguments. An Ameriprise study found that three in ten couples argue about money at least once a month. When dealing with family finances, an open communication policy with your spouse can help eliminate any confusion and prevent feelings of burnout.
To communicate more effectively about money, start by setting a time to sit down with your spouse to openly discuss financial matters. To help facilitate this conversation, use financial questions to help get the ball rolling. You might be surprised to learn your partner’s attitudes and views toward money! Be prepared to answer questions truthfully with one another to ensure that both of you are on the same page.
It can be helpful to schedule monthly or weekly meetings with your spouse to check in about financial matters. Having these meetings frequently will ensure that there isn’t any confusion about current family finances. Having a deep understanding of each other’s goals, habits, and troubles can allow spouses to work together to build a solid financial foundation fit for their family’s needs.
Set Realistic Goals
Families should always have some sort of financial objective set in place. When a financial goal is set, it can provide families with something to work toward, offering a sense of control and confidence when dealing with money. When you achieve a financial goal, you’ll be proud of yourself and feel more motivated to work toward other objectives.
It’s wise to start with smaller financial targets, and then work your way up to bigger milestones. When a financial goal is set, rules and boundaries can be put in place to keep families on track for success. Some rules may include sticking to a budget or increasing savings.
It’s important that these targets are attainable for your lifestyle, so you’ll want to have financial goals that work with your family’s current situation. Some examples of family financial objectives include saving for a house, paying down debts, or saving for the arrival of a new baby.
Work with your spouse to figure out how you’ll make this work. Writing down steps and rules is a great way to visualize what needs to be done. For example, if your objective is to start saving for a new house, work with your partner to calculate how much house you can afford. Having a number in mind will help you be able to pinpoint money habits that you can change in order to achieve the goal.
These habits could be overspending or cutting down on impulsive buying. Once you know what you can afford, you can move forward with budgeting and saving to make sure that you achieve this goal in a timely manner. Goal setting is a smart money move because it’ll give you something to focus on and ultimately put you and your family in a better financial position.
Keep Your Finances Organized
We’ve all felt that sense of defeat when we see our bills start to pile up. You start to feel like you have no control over your finances, and it can be hard to figure out where to start. While it may seem easy to let your financial records and statements sit untouched, it’s crucial to have a system in place to stay organized. To keep your finances in order, you’ll need to actually read your statements and bills as they come in. Ignoring these could put you in a worse financial position later on.
Once you’re in the habit of reading your statements and bills, you’ll need some sort of organizational system. Filing cabinets can help you organize your finances in an easy and structured way while keeping everything in reach. If digital methods are more your thing, creating a folder on your computer can also keep your financial matters in order. When you’re sorting through your records, pay attention to anything that’s old or outdated. Getting rid of paperwork that’s no longer current can make it easier to arrange everything and focus on what truly matters.
It’s also important to understand where you stand with your debts. If your debts are unorganized, then there’s a good chance your finances can spiral out of control, which will lead to more debt. As you go through your records, take note of where your debts are and how much you owe. You’ll also want to note the interest rates associated with each debt. When paying back debts, there are two methods that may be right for you.
The avalanche method and snowball method are two techniques that can be used depending on your debt situation. Staying on top of your debt is crucial because it can affect your family finances down the road. Bad credit scores can affect your ability to buy a car, a house, or even your ability to obtain a personal loan. Overall, financial organization will allow you and your family to be in control of your money matters.
Prepare For Your Future
Planning for your family’s future is a big responsibility. It can feel daunting to begin this stage because there’s so much to take into consideration. During this stage, it’s important to remember that no action is too small. A great way to make sure you’re prepared for anything is to build an emergency fund. These funds can be used for anything that life throws your way. Even putting a small amount of money away each month to cover unexpected expenses will help your family in the long run. When family emergencies arise, you’ll be grateful that you have something to fall back on.
Another way to set your family up for future success is to start thinking about college early. Let’s face it, college is expensive. There’s no greater gift to your child than helping with college costs. A 529 Plan is a great option for young families looking to start building their college funds. Even small amounts of money will grow as time goes on. Increasing your child’s future earning power through funding their education will pay off as they become independent and form their own goals. Knowing that you’re taking the steps necessary to ensure that your family’s future is bright will ease your worries as your children grow up.
While managing your finances can be a lot of work, the results are worth it. Knowing that you’re taking strides to protect your family’s future will allow you to stay present and be the best parents you can be. Communicating with your spouse and setting goals will allow you to work as a team to make sure that your family is prepared for anything that comes your way. Family finances can be tricky, but there are small steps that can be taken every day to take control of your circumstances.
