3 Tips for Supporting Your Family Financially
June 16, 2022
by mikkie mills, guest contributor
When you have your own family, your priorities start to change. Whether it's just you and your partner or a house full of kids, it's important that you take steps to ensure your family is supported financially both immediately and in the future. For most people, living from paycheck to paycheck is a harsh reality that can make saving seem impossible. However, many people can still take action to set their families up for long-term financial security by following these simple suggestions.
1. Start by Getting Debt Under Control
Millions of Americans today are living with debt. When so much of your money is going towards interest and paying off a loan or credit card, it can be challenging to have enough left to save for the future. This is why it's so important to get your debt under control first and foremost. For many people, this means sacrificing and saying no temporarily to items that you may want but don't need. When you're in debt, eating out, going on vacation, or buying new things for your home that aren't a necessity may need to wait for a while. Instead, all of that otherwise expendable money should go towards paying off your debt.
Keep in mind that there are plenty of resources that can make it faster and easier for you to pay down your balances so you can save more money overall. For example, an FHA refinance could help lower your interest rate and monthly mortgage payment so you have more funds to put towards credit cards and loans. There are also programs that can help consolidate many debts into a single account and payment so you can avoid paying interest on multiple balances.
2. Set Aside Money for Emergencies
One of the initial setbacks that prevent many families from building financial security is having to return to their credit cards again and again for emergencies. While paying down your debt should certainly be a priority, it should be done in tandem with building up an emergency fund for unforeseen circumstances. Most financial experts recommend starting with a goal of $1,000 since this is a manageable amount that tends to cover most common expenditures that aren't required on a routine basis. Once you reach and maintain this goal, you can avoid a lot of unnecessary credit card use.
From here, it's wise to keep saving until you have a backup fund that totals six months' worth of income. This can help when you have a serious expense, such as an injury or surgery, or if you need to make a major purchase. Most of all, this means your family has what they need to survive and pay the bills in case of job loss.
3. Protect and Invest in Their Future
Whether you're the sole provider of your family or you work with your partner to pay the bills, you need to develop a financial plan for your future. Start by talking with an expert to help you prepare a will and make plans for your estate. This should also involve securing a life insurance policy for you and/or your partner if you don't already have one. A professional can help you determine the right amount based on your unique situation, considering factors like:
- Cost of living in your area
- Number of dependents
- Childcare and education costs
- Funeral expenses
- Mortgage or rent payments
It's also a good idea to start saving for retirement, as well as college expenses for your children if you so choose. A financial planner can help you find the right investment companies that can grow your money while keeping it secure. They can also help you learn about the right amount to contribute while limiting your tax burden.
While money can be a symbol of wealth and prosperity for some, for many people it's simply a means to protect and support their family. While it's never too late to improve your financial status, the earlier in life you start, the better off you'll be. Take steps today to prepare your family for a secure future and more peace of mind.
Mikkie is a freelance writer from Chicago. She is also a mother of two who loves sharing her ideas on interior design, budgeting hacks and DIY. When she's not writing, she's chasing the little ones around or can be found rock climbing at the local climbing gym.
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