A main concern for the entire family, family finances have arrived to be a regular subject of discussion in many circles since the economic recession of 2008. The major increase in layoffs, foreclosures and bankruptcies due to the recession show that Americans had been spending more than they can afford for years. As a consequence, consumers have started to search for basic financial advice in order to properly manage their family finances.
Below you will see some useful considerations about family financial advice that can help you.
- Budget Advice
Talk to your family about ways to cut the budget and establish that every member will contribute to certain changes.
As a basic element of any family financial venture, the budget should be carefully managed. It is essential to keep track of all the money no matter if you are interested in saving money for a family trip or just trying not to do more debts. To make a family budget function, you should get a buy-in from the family, because even the children can be affected when parents decide to cut expenses. It is advisable to discuss financial changes within a family meeting, so you can make fundamental decisions together.
- Dealing with Debt
More and more Americans prefer to pay cash rather than using charge card when doing their daily shopping. The most important financial advice regarding debt is simply trying to avoid it as much as possible.
You should teach your children that unless they afford to purchase things by paying cash, they cannot buy them. Officials say the credit card spending has been trending lower since 2007, even before the recession. It seems that time of easy credit is long over, so you should always be conscious in avoiding debt.
Financial specialist advise to choose saving money for retirement instead of saving money for your children`s college. The argument behind this statement is that children can always finance their own education, while parents cannot get financing to support themselves after retirement.
In addition, families who can`t afford basic retirement savings should not consider saving money for luxuries such as vacations or new cars.
- Financial Freedom
One of the best financial advice is to achieve financial freedom for your family, as this status will allow you to accomplish other goals. Your family has reach financial freedom when it makes more money than it spends, can save money every month and has enough cash to pay all its financial obligations for least six months in case of emergency.