Tips for the Young Families Finances

Young families often feel over whelmed with managing the family and struggling with their money which always seems to be limited.  Just when you think you have your funds figured out for the coming month something unexpected pops up and you need to refigure.

When it comes to managing your family money if you are having a problem getting a handle on what to do you may want to consult with a financial planner.  They are not just for the rich people they can help you establish priorities and make a spending plan.

One of the first things you want to do when you allocate your money is to pay yourself first.  I know this sounds hard when funds are limited, but you need to plan for emergencies, retirement and college.  Figure out how much you can put aside from each paycheck.  It is easier if you have this amount automatically deducted from your paycheck and sent to your savings account.  Once you have started saving you will want to see it grow and will find ways to cut unnecessary spending.

Spending needs to be done thoughtfully.  Making an impulse buy of a few hundred dollars can throw your finances way off.  One way to avoid this problem is to leave those credit cards at home.  If you need to make a trip to get the card and then come back to make the purchase it gives you time to really consider if you really want to spend the money or if your would rather have it grow as savings.  Think about any large purchase for at least 24 hours before making the buy.  Keep in mind that what you think you must have at this moment may not be important to you at all next month.

You can also dribble away a lot of money with little frequent purchases.  If this is your problem you may want to consider some planning resources which are available to help with setting up and following a spending plan.  Spending $3.50 each weekday for morning coffee burns up about $17.50  per week, $70 per month and $910 per year.

Although it isn’t pleasant to consider you must plan for the unexpected.  If something happens to you there needs to be life insurance to help your surviving family members.  You also need to have a Will.  A Will enables you to state who should be the guardian for your children should the other parent not be available.  A Will also enables you to name the executor who will be the person to administer your estate.  Many people have the idea Wills are only for old people or wealthy people.  This is not the case at all.  If you have a very simple estate you may be able to prepare your own Will using one of the kits available online.  It is always a good idea if your estate is the least bit complicated to have an attorney specializing in estates and trusts draft your document.  A simple Will done by an attorney will probably be less than $500.  Of course, if you require more involved estate planning and documents the cost will be more.

It may sound selfish, but if your need to choose between saving for college and saving for retirement go with saving for retirement.  If you have saved from the time you are young when it comes time for your child’s college you should have a better cash flow.  Also if you have been saving in a Roth IRA these funds may be used for college.

Curbing free spending ways will not be easy at first, but it will become rewarding.  Just start with little steps and work up.  Your children will learn by the example you show them.  If you have good financial values this is what they will carry with them.  Unfortunately, if you are a spendthrift they will learn that being careless with money is the way to handle finances and they will likely not have a bright financial future.