How Families Can Save Money: 5 Ways to Plan & Save for Your Family’s Financial Future by 30Seconds Mom
Raising a family can be challenging, and trying to make sure that you meet your family’s needs and still save money for your family’s future can be a juggling act. With the rising costs of food, rent and the expenses involved in raising children, some people often have no choice but to borrow money through credit cards. A swipe here, a swipe there, and before long, people find themselves in debt.
CNBC reported that the average American household has $90,460 in debt spread across credit cards, mortgage and student loans. If you decide you don’t want to be part of the growing percentage of families in debt, here are five easy ways to plan and save for your family’s financial future:
1. Make a Plan
Everybody has their idea of what they consider a stable financial future. Take some time to sit down and think about where you want to go. If you are trying to create a stable financial foundation, it helps to write your goals and how much money you think you will need to achieve them. You don’t need to come up with a precise number – a ballpark figure will do. Since this involves the entire family, it may be a great idea to involve your partner and your children if they are old enough to understand. Having everybody on the same page may help ensure that you achieve your goal sooner.
2. Make a Household Budget
To effectively manage your financial resources, create a household budget and stick to it. Keep track of your budget with a downloadable app of your choice to help you manage your cash flow. Or you can always do it the old-fashioned way with an Excel file or even just using a pen and a notebook. Whichever way you choose to keep track of your expenses, the important thing is that you know where your money is going every month, so you have a clear picture of your finances.
3. Invest in an Annuity
It’s never too early to think about retirement. Prepare for your retirement by investing in an annuity. An annuity is an insurance contract sold by banks, insurance companies and insurance brokers that gives you fixed income payments in the future that are made possible by your present contributions.
This is how an annuity works: After you sign up for an annuity, you make payments either in a lump sum or by paying parts of it within a specific time period. This phase is the accumulation period. After you have finished your contributions, the company will pay you an income in the future, which they compute using an annuity formula. In a nutshell, an annuity is a retirement plan and additional security for your family when you retire. It may help ensure that you are comfortable financially in your retirement.
4. Pay Attention to Food Costs
When you’re just starting your financial journey, it's challenging to accrue savings when your grocery bills are high. One of the most effective ways to address this situation is meal planning. Meal planning is writing down the menu of the week and the ingredients needed to make the recipes. This gives you a clear picture of how much you’ll be spending. It might be a good idea to carry cash instead of charging the groceries to your credit card. Taking a finite amount of money may help you focus on buying only the essentials instead of giving in to the temptation of getting items that you don’t need.
5. Have a Clear Grasp on Your "Needs" and "Wants"
Another excellent way of saving for your family’s future is to have a crystal-clear picture of your needs vs. your wants. For example, food is a need, but do you really need to buy lunch at work, or will a packed lunch work just as well? A birthday is a memorable part of every child’s life. Still, perhaps instead of having an expensive birthday party, a small intimate party with close friends and family may be just as memorable, if not more memorable. Or maybe you can cut down on the number of times you eat out and whip up a fantastic meal at home instead.
Remember that being frugal doesn’t mean you have to miss out on fun things and important events; it just means that you get creative with developing alternative ways to do these things that are lighter on your wallet – and budget.
There has never been a more crucial time to plan and save for your family’s future than right now. It can be a challenge, but with determination, creativity, a clear plan and some luck, you may achieve the financial future you and your family desire.