Home >
Education Center >
Family Finances
Family Finances
Click here to see
our selection of Baby products.
 Many
people put off marriage and having babies until they are “financially
secure.” Though it is a good idea to have a nest egg ready
the idea of ever being financially secure is a bit of an urban myth.
This is true because as you become older and more responsible you
will naturally have more bills to pay, a higher mortgage and more
belong to more organization that require financial output. Learning
to manage the money you have right now is the surest way to financial
stablilty. Once you know how to manage money it won’t matter
if what your income is as you will know what to do with it regardless.
Following are just a few tips on managing you
money and acquiring financial peace of mind for yourself and your
family.
Log your spending habits for one month
There's no miracle to saving money. It's as simple (and as difficult)
as figuring out how to spend less than you earn. But before you
can cut your spending, you need to know what it is you're spending
your money on. So, for the next month, keep a log of all your daily,
weekly, and monthly expenditures (use a little pocket journal to
jot down notes as you go, just as if you were on a business trip
keeping track of your expenses).
Prepare yourself for some sticker shock. That
harmless morning latte on the way to work can add up to a tidy $60
a month, or $720 a year, or $7,200 in ten years — a nice chunk
of savings. And those impulse baby clothes purchases you put on
your credit card really cost 20 percent more than it says on the
price tag (because of interest charges) unless you pay the bill
in full each month. No one is suggesting you go without caffeine
or your baby go without adorable outfits — just be smart about
it. If you can't afford Starbucks, keep a stash of ground espresso
at work, and make your own pseudo-lattes (microwave ovens do a respectable
job of steaming milk). Or if your budget is tight, wait for those
baby clothes sales to go on sale when you shop, and give yourself
a cash limit.
Pay yourself first
It may seem counterintuitive, but the secret to getting into the
savings habit is to put yourself first. That doesn't mean buying
every CD or kitchen gadget that catches your eye — it means
including yourself among the regular creditors you pay every month.
Set some realistic long-term goals and then "pay"
yourself by putting money aside in a savings or investment account
on a regular basis. If you wait until the end of the month to see
what's left over after paying for essentials and shelling out a
few extra dollars here and there for impulse purchases, you'll probably
find, like most people, that there isn't much left.
Stagger your savings due dates
Most IRAs, college accounts, and other savings options allow you
to pick your own date for automatic withdrawals from your checking
account or paycheck. Stagger these dates to make sure all the money
isn't transferred out of your account on the same day. If you're
paid biweekly, tie one withdrawal to each payday. If you're self-employed
and money comes in throughout the month, pick a couple of dates
in the middle of the month at a time when you're not paying other
bills.
Pay down debt
You've heard it before, but it still may seem hard to believe: Paying
off your debt is one of the best ways to save money. This is because
the interest you pay on most loans (particularly credit cards) is
much higher than the interest you get with most savings options.
So get rid of as much credit card, student loan, auto loan, and
other personal debt as you can (a home mortgage loan should be your
one big debt), and then start saving.
Be your own loan officer
When you finish paying off a car loan or other type of loan, keep
making the monthly payments — to yourself. Put them into a
savings account or, better yet, set up an automatic withdrawal for
the same amount into a higher yield investment account.
Motivate yourself with a big-ticket goal
Pinpoint what you really want (a new sofa, a DVD player, a vacation)
and what it will cost, and set a realistic goal, such as giving
yourself six months to save for it. Cut out pictures of your goal
and put them on your bulletin board at work, your refrigerator at
home, and in your wallet. Every time you think about buying new
shoes or towels, ask yourself if you want or need them as much as
what you're saving for.
Open a savings account you can't touch
Save for even bigger purchases, such as the down payment on a house
or car, by putting chunks of saved-up money into certificates of
deposit (CDs). These accounts offer virtually no risk, they earn
higher dividends than plain old savings accounts, and the money
must stay in the account for a predetermined period of time —
so you can't get at it whenever temptation strikes.
Start a loose change jar
Put a jar — preferably a large one with a narrow mouth, so
you can't get your hand into it — in a prominent place, and
empty your pocket or wallet change into it at the end of the day.
If you can't stand the thought of coin rolls, use the change-counting
machines available at some supermarkets when the jar is full. At
the end of the year, this found cash can add up to enough money
to pay for a weekend getaway, a Christmas gift, or a health club
membership.
Sock away surprises
Any time you get an unexpected windfall — a tax rebate, holiday
bonus, or cash gift — put it into your savings account. You
weren't counting on this money as part of your regular income, so
don't spend it as such. Think of this as your Europe or new car
account. Or, if you haven't gotten out of debt yet, use it to pay
down credit cards and loans or make an extra mortgage payment toward
the principal (which reduces the interest you pay over the life
of the loan).
Click
here to see our selection of Baby products.
Back
to Baby Mine Store Education Center |
