To manage your family’s finances, you should do things like make a budget using an app that allows you to share access with your family members, track your family’s spending, and pay off debt quickly. You should also make sure your family is capable of handling unexpected expenses by building an emergency fund.
Being able to manage your family’s finances can help ensure you have enough money to pay for necessary expenses and save for future goals. Below, we will run down what you can do to help keep your family’s finances on track.
1. Make a Family Budget
Making a family budget allows you to plan out your spending, so you can make sure you are not spending more than your household’s income. With the budget, you can prioritize essential expenses to ensure your family will have enough money to pay for them. It can also help you plan out how to achieve financial goals like saving up for a family vacation or paying for your kids’ college education.
Schedule time weekly or monthly with everyone in the family to review the budget and make sure you are on track. In addition, you should adjust the budget for any changes in income or spending when you are reviewing it to make sure it always stays updated.
2. Track Your Family’s Spending
It’s a good idea to track your family’s expenses, so you know how much you are spending. Tools like spreadsheets can help with organization and analysis, but you still have to do a lot of leg work on your own. Fortunately, some budget apps, such as the WalletHub app, make things easier by letting you sync your financial accounts for automatic tracking. You can also set up alerts to notify you when your family is approaching or has gone over your spending limit.
3. Set Savings Goals
Having goals can keep everyone motivated to save money instead of spending it. So, determine what financial goals you want your family to accomplish. They should be things that will benefit everyone in your family. Examples include reducing household debt, saving up money for a family vacation, getting a new family car, or reducing overall household spending.
4. Build an Emergency Fund
Nearly 1 in 5 people say they couldn’t come up with $1,000 in cash within 24 hours to save a loved one’s life, according to a WalletHub survey. You want to make sure your family is prepared for any financial emergency, so having an emergency fund is important.
An emergency fund can help your family pay unexpected expenses, like medical bills or home repair bills, and possibly prevent your household from going into debt to cover these unexpected costs. It can also pay for your necessary expenses if you lose your job. You should have at least three to six months’ worth of your living expenses in your emergency fund, according to financial experts.
5. Pay Off Household Debt
The average household carries nearly $150,000 in debt, according to WalletHub research. The interest on your debt can eat away at your family’s savings. However, by paying more than your minimum monthly payment, you can reduce the amount of interest you pay and get out of debt sooner. You will also free up more money that you can use toward family goals.
You can use WalletHub’s debt payoff plans to find the quickest and fastest way to get rid of your household debt.
6. Download a Budget App
A budget app can help you keep track of your family’s spending anywhere you go straight from your phone and notify you if you are going over your spending limit. Some budget apps, like the WalletHub app, let you share your account with multiple people, so your family members can have easy access to the budget and everyone can get on the same page about finances.
7. Use a Budgeting Calendar
A budget calendar allows you to track when your money comes in and goes out over a period of time, like a month, a week, or a year. You can also set reminders for when bills are due, so you don’t miss payments and incur late fees. You can use a paper budget calendar or a digital one, online or through budget apps.
8. Get Everyone Involved
Just because you’re the head of the household does not mean you have to manage the family’s finances alone. Get input from your significant other and the kids on things like the budget and family goals. This can help make sure everyone feels included when important financial decisions are made.
9. Encourage Communication
Communicating with your family about finances can help prevent misunderstandings and can allow everyone to work together to achieve family goals. It’s also a good idea to communicate to your family members what is expected of them to help reach these goals.
10. Talk With a Financial Advisor
A financial advisor can assist you in getting your family’s finances in order by guiding you through different investments and strategies that can help you save for the future. They can also offer financial guidance on things like taxes, college savings plans, retirement, and estate planning.
11. Start Saving for College Now
A college education can be very expensive, with the yearly tuition rates averaging $11,260 for a public in-state school and $41,540 for a private college. The sooner you can start saving for college, the more money your child will have to pay for things like tuition and books.
12. Add Your Kids as Authorized Users on Credit Cards
Having good credit is important for financial stability. It’s also an important factor for things like buying a home, renting an apartment, getting a car loan, and even applying for a job. Responsible credit card use is the easiest way to build credit. However, kids under 18 years old are not eligible to get a credit card on their own, so the best way for your child to build credit is for you to add them as an authorized user on your credit card account.
13. Check Your Insurance Needs
Make sure you have the appropriate insurance coverage to protect the things you love. For example, ensure that you have adequate health, home, car, pet, and life insurance to pay for expenses that might set you back financially if you don’t have the money on hand to pay for these costs.
To learn more, check out WalletHub’s guide on money management.
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