Once you have children, you may find yourself thinking even more about family finances and building wealth for them. You want to provide as much as you can for them, while they are growing and once they have left home as well, while still leaving yourself with something to live on in your old age. It’s a lot to think about.
Whether your financial aims are saving for holidays, putting aside a university fund, or saving for your own retirement, here are some tips to make things easier.
Set Your Goals As a Team
The first thing to get clear with your partner is what your financial goals are and what your current circumstances are, so that you can see how realistic your goals are and what changes you may need to make in order to meet the goals. It’s quite possible that two people can have vastly different opinions on how much money should be spent on luxuries and fun now, and how much should be saved for university fees, maybe helping your children to buy a house and also for your own retirement. Make sure that you both have a clear and realistic picture of what you are tying to achieve and why, and whether this is achievable before you begin.
Have a Family Meeting
It’s difficult to say at what age you should start talking to your children about family finances, but certainly as they reach their teens and start looking at their own futures and what might be possible, it is definitely a good idea to get them involved at some level.
Assuming you are not wealthy enough to have luxurious holidays every year, pay for their driving lessons and buy each of them a car, put all of them through university fully funded and give them a substantial deposit towards their first home, then there are trade-offs which will have to be made which wil affect them, and it’s a good idea for the children to have some input into the discussion, so they can then understand why maybe they can’t have everything they want each Christmas because you are saving for something more important for them,
Having a family meeting every so often is a great idea. They allow you to discuss anything coming up that can affect your finances, ensure you’re all on the same page, and teach your kids valuable lessons about money that can help them in many ways. Keep up with these meetings and you’re less likely to stray from your goals.
Look at Income Levels
Make sure you explore your options carefully when it comes to building wealth. You have many options, and there are likely different ones that will suit you. You don’t just have to depend on your 9-5 job to earn money. There are many additional things you could do at home and online to earn money, and maybe you can even teach your older children how to earn a bit of money for themselves and to manage pocket money too.
Choosing a handful of things to explore and experiment with will ensure you’re building wealth through plenty of different channels and you never have to worry if one of them falls through.
Invest In Yourself
Investing in yourself is so important – it can give you more transferable skills, make you more employable, and could even give you ideas to create a business of your own. Never stop investing in your own development, and ensure you do the same for your children. Building their skills and experience across a wide variety of disciplines, is crucially important for them to be more employable when they leave home.
Save A Percentage Of Your Income
It’s always a good idea to put aside a percentage of your income, as well as spending money on your investments and other ventures. This way, you won’t need to rely on credit if an emergency crops up.
When looking at saving money, you may want to consider the risks of what you are saving/investing as well as the returns. Interest rates on ordinary (but totally safe) savings accounts are at drearily low levels right now and it may feel like you are getting nothing for your money.
Investments with high returns generally come with higher levels of risk, where you could even lose the money you invested, and there are many frauds and scams out there, so be alert to possible dangers. You could research this area yourself, by reading stock market books for beginners, or similar, but it might also be worth talking to a qualified professional if you want to find the best way of saving and/or investing your surplus funds.
Find Ways To Drop Your Living Expenses
Spending less than you earn is one of the most crucial factors when you want to balance the family finances and build wealth for your family. Make sure you look for ways you can drop your living expenses and that you seriously think about purchases before making them.
There are plenty of blogs devoted entirely to the subject of living frugally, and you can find plenty of information online about how to save money. Some examples would be:
- Checking every year to make sure you have the cheapest utilities and insurance providers
- Getting a smart meter and tracking energy usage in your home – alsomaking sure you have sufficient insulation to stop energy wastage
- Looking our for coupons and discounts and using them when you can
- Buying less pre-packaged food and more basic ingredients, and cooking for yourself
- Wean yourself off shopping on oimpulse, and ask yourself if you really need things before you buy them
So hopefully that has given you some ideas as to how to get the family finances on track. Let me know how you ike to look after your finances.