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FAMILY TOPICS
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Family Finances
 For
many families, one of the biggest sources of disagreement and aggravation is the subject of family finances. For
many of us, the money coming in never seems to match the money going out. Then of course, there always follows
the stress of what
to spend the money on, and when,
and how much,
and where, and
on and on.
Getting control of your finances means a lot more than just getting control of your money. It means getting a handle
on your habits--both thinking and spending--as well as your short term and long term goals. Not only can getting
control decrease much of your stress (making for a more satisfying family life) it can also help you efficiently
prepare for the future (making for a more leisurely life as the family matures). Although many families make use
of a financial advisor, a large degree of your financial control can be handled on your own.
Leaving your finances "to chance," as so many families do (many without even realizing that they are
doing it) is a sure-fire path to allowing them to get out of control. Without a plan--for a budget, for getting
the most value out of the things that you buy, and for your future--you will most likely find yourself in a constant
uphill battle with the finance gremlins.
It sounds simplistic, but simple concepts are often the basis for effective
life changes.
So where do you start to bring your finances under control? Begin by
taking the time to work on (and live by) a family
budget--everything else flows from there. Then, concentrate
on how to save money on what you own or buy,
and how to get the most purchasing power possible. All along the way, try to remember to include planning for the future
in your budgeting process whenever you can.
Eliminate the waste:
Quit paying large sums of money for things that are rarely used--expensive toys that sit in the corner, things
for hobbies that you never took up, 4 Wheel Drive SUV's a thousand miles from the nearest snowstorm. Stop "investing"
in wasteful items and get rid of those that you have and convert them into cash.
Decrease your debt: Collectively,
we keep adding to our debt load month after month. At the same time, our saving rate is generally headed downward.
With a super-strong (and growing) economy, you may be able to hold on to such a position for a while, but should
the economy stagnate--or crash--you can quickly lose your footing. Start the process by putting the reins on spending
that increases your debt load, both on necessary items (like food and shelter) and those that are not necessities
(like "toys"). See some tips on saving
money on specific items and getting control of your purchases. Then, with the aid of a family budget,
begin to designate a specific amount monthly toward reducing the debt--not paying the monthly minimums but adding
enough to make a concerted effort at debt reduction. Many families also take advantage of Home Equity Loans, where they can consolidate
their debt into a lower monthly payment (and generally a lower interest rate) so that they can concentrate on debt
reduction. A good source to consolidate your bills is Quicken Loans' free home loan service. Complete
1 form, get up to 4 offers. You can get up to 4 offers from lenders, all competing for your business. Click here for more
information.
Start a program of saving
instead of spending:
Not only do you have the benefit of eliminating waste (and the
availability of money from the elimination) you can begin to focus on long term goals instead of short term spending.
If you are not already involved in an investment
program (or if you are not devoting enough to it), get started now.
Don't procrastinate: Because of compounding--the negative effect
of compounding when it comes to credit (the longer you have the debt the more interest you will pay) and the positive
effect of compounding with savings (the longer you have the savings the higher the return) to procrastinate is
to cost yourself lots of your hard earned dollars.
It is amazing the difference getting control of your finances will make in your life. Less money will be wasted,
so you may find you don't have to work as long (or hard) to make ends meet. That means you'll have more time to
spend on the important things in your life. Your stress level most likely decrease in direct proportion to the
decrease in bickering over family money.
 The
Average Family's Guide to Financial Freedom BIll and Mary Toohey tell the story of how they got their financial picture in
line and increased their net worth to nearly $500,000. The plan takes a little work and some sacrifice, but the
rewards are, for most families, well worth the price.
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