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Top 5 Money Management Tips for a Family

Top 5 Money Management Tips for a Family


It seems mystery for some people when talking about managing family finances—haphazard household budgets with poor organization and planning, overloaded credit lines and juggling bank account can all result in financial disaster. However, with just a few common sense money management tips, you will be able to put your family finances in order and make your future prosperous.

1. Collect and document.

We suggest our readers to take stock of all the financial holdings such as bank accounts, retirement account, stocks or any other funds. Also, include all the real estate, petty cash and savings and investments.

2. Record and track spending.

You should record and track all your expenditures for at least one month to determine your expense breakdown. Include mortgage payments, credit card purchases, utility bills, student loan payments, small purchases, debit card transactions and so on. By doing so, you will be able to paint a financial picture of your spending habits, hence you can know where to trim the habits by looking through the areas of overspending and impulsive shopping. Also, don’t forget to budget at least 10 percent of your monthly income into your saving account.

3. Create clear and actionable goals.

You should also create clear and actionable financial goals. You can pay a certain amount of money for credit card debt, invest in a retirement plan and stash into a child’s college saving account. If you have specific goals, you will be more effective in money management. But don’t forget to include precise date and amount to work with and post the goals somewhere you can frequently see and remind yourself.

4. Manage your debt.

Can you distinguish what is a “good” debt and what is a “bad” one? It may be a smart investment to loan for purchasing items with relative stay power like home or college education. But accumulating credit card debt for quick purchases, like food or vacations, are not recommended, according to an article “Controlling Debt” from CNN Money. Besides, the debts have different priorities and you should aim on the high-interest balances first and pay more the minimum amount required. Don’t borrow from the long term investments such as retirement account.

5. Management through good communication.

The Ohio State University Extension suggests that families should develop skills to sit down together and talk honestly and calmly about financial management. Limits should be set on how much money can be spent without consulting with other members and the figure can vary from $50 to $1,000 according to different situations. Keep open conversation between family members and focus on finding solutions and establishing effective strategies for family finances.

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