New Year, New Financial Habits for your Family
Money is one of the top reasons of stress for most Americans. Effective money management can help you account for your day-to-day expenses, set aside money for emergencies, and build up a savings account. 2020 was difficult for many reasons, if you experienced financial loss or consider the year a financial wash, this is a good time to look forward and set new goals. Below are a few ideas for helping you manage your family finances in 2021!
Track spending to see where your money goes. Your daily coffee or monthly subscription you forgot about can really add up! Did you know if buy a $5.00 drink 3 times a week, that will cost you $60.00 per month?! Is the gym or Netflix subscription worth the money you spend on it each month? Maybe now is a good time to evaluate what you can cut back on or give up. The key to budgeting is spending less than you earn, so cutting out absent-minded spending can change your financial outlook quite dramatically.
If you’re feeling serious financial strain, take a moment to evaluate your housing costs. As a general rule, you don’t want to spend more than 30% of your income on housing. Whether you committed to a home and then experienced a change in your financial situation or didn’t anticipate the many expenses that come with owning a home, you may want to consider downsizing or renting. Short-term sacrifice of space or upscale finishings could lead to the house of your dreams in the future.
Communicate often with your spouse or partner about your family finances and include any of your children you feel are old enough to be involved in the conversation. Remember that you are the greatest role model in your child’s financial education. Your kid(s) are likely somewhat aware of your financial situation and will remember a lot about how you handled it, from how you speak about money to how you manage debt. Help teach your young family members good habits now.
Whether you’re someone who enjoys budgeting or if the idea of having to watch your spending makes you cringe, stating your goals clearly and simply is a great way to get started! Then don’t forget to check in on your goals every few months. This could serve as a nice reminder of what you hoped to achieve and can set you back on the right path to meet those goals. Or, if an unexpected life event changes your financial picture, update your goals, as necessary.
If you’re not sure where to start or the next steps to take in your financial journey, maybe it is time to speak with a professional. WESTconsin Credit Union offers free tools to help you with a variety of subjects from budgeting, saving, investing, and most anything in between! Visit our online learning center or call to speak with one of our Member Services Representatives today.