The Best Way a Family Can Save Money
With the American economy experiencing a slowdown that could send it into a recession, families need to save their dollars. Tough economic times mean that companies are less likely to hand out salary increases, and in many cases, they cut their payroll. Being prudent with your money during a downturn can help you avoid financial instability. There are numerous ways a family can save, and all of them are worth considering -these will allow you to put more money in your back pocket, and use it for your retirement and the kid’s college tuition.
Review Your Budget
The first place to start is by reviewing your budget. Do you know where you are spending your money? Take account of every penny you spend during the month. If you break everything down into categories, you’ll get insight into what areas of your finances are consuming the most of your income. A reasonable budget should take into account your housing costs, utilities, living expenses, food, and entertainment. You can further subdivide all of these categories.
For example, with utilities, you can break this down into electrical and water consumption. By clearly understanding all of your expenses, it gives your ideas on where you can cut back. Being frugal with your money doesn’t have to impact your lifestyle. All you need to do is cut back on necessary purchases. For example, do you need that second cup of coffee from Starbucks? Examine your expenses and do whatever you can to shave a few dollars off of your purchases throughout the month. Look at other expenses like cable and streaming services. Do you need Amazon and Netflix? Cut duplicate subscriptions services that are costing you money. How many times do you eat out in a month? Every family deserves to get out once and a while, but review your choices for the most affordable restaurant options. Instead of eating out every week, try once every two weeks instead.
Another easy way to save money on your monthly budget is to make use of coupons and discount vouchers. There are countless websites offering discounts on anything, from groceries to electronics. If you are heading to the grocery store, check out the site of the retailer for any coupons or discounted products. Compare the pricing and the quality of your favorite retailers. You might find that one of them is better for specific items, such as household cleaners, while the other is better for fresh vegetables. Take advantage of discount coupons that come in the mail; many local businesses run promotions for local customers every week. In America, it feels like you should never pay full price for any item. There are coupons and discount vouchers available for dinner with the family at fast-food restaurants and trips to the cinema. If you take a few minutes every week to scour your favorite discount websites for deals, you could save your family hundreds of dollars over a year.
Invest in Retirement Funds
Every family needs a long-term investment vehicle to ensure financial prosperity. Parents need to retire, and kids need to go to college. By saving for your kid’s college fund, you avoid the need for them to use student loans for their higher education. Student loans will shackle your children with a debt that can take them up to 20-years to repay in full. By helping them with a college fund, you give them a head start in their adult life. Your retirement is also a significant concern that you need to plan for decades in advance.
An IRA is a pooled retirement investment managed by financial professionals. The government allows you to contribute $6,500 to your IRA annually, so make sure you are maximizing your contributions. If you have anything left over, open another mutual fund account with a financial services firm. Using an IRA or mutual fund, a money manager invests on your behalf into the stock and bond markets. These individuals have expertise in finding high-yielding assets that offer low risk. The power of compounding interest makes this an ideal financial vehicle for long-term savings for the family.
Adjust Lifestyle Activities
Look at your lifestyle activities and see where you can cut back. Smoking and drinking are two areas where adults should not be spending money. Both of these self-destructive habits ruin your health, and that of your family as well. Instead of spending money on cigarettes and liquor, think about how much money you would have in your investments if you divert the funds to other assets. As we approach 2020, alcohol and smoking have no place in the family unit, and it's best to put these habits to rest.
Trade Your Car in for Something Economical
Gas is a significant expense for any family. Cut your costs by trading in your gas-guzzling SUV for something more economical. By reducing your transportation costs, you can contribute more to your investments. If you save one tank of gas every month, imagine how that will add up over the decades. If you travel to work by yourself, consider carpooling with other colleagues or people from your neighborhood that are going near your office. Carpooling reduces commuting expenses for everyone involved – and it’s kinder on the environment as well. Many Americans make the mistake of attaching their identity and status to their vehicle. As a result, they are always looking to lease something bigger and better than they previously owned. There’s nothing wrong with upgrading your car, as long as you can afford the upgrade. If you’re trying to save money, then consider cutting back on your next car lease. Go with something that’s both economical and affordable, and you’ll thank your financial foresight in your retirement years.
Kids need parents around while they are growing up. If the parents are both at work all day and night, and sometimes on the weekends, then there’s little room left for developing family relationships. It’s for this reason that many American families are breaking up. Financial hardship causes the parents to pay more attention to the bills than they do the kids.
As a result, families become disconnected and start to develop dysfunctions. Bringing in more income doesn’t have to cost you your family relationships. With the advent of the internet, anyone can make more money from the comfort of home. Look for ways online that can earn you a few hundred dollars every month. Sites like Fiverr and Freelancer have plenty of freelancing opportunities in a wide range of industries and niches.
Saving money for a down payment on a house is a big move and with today's hot real estate market, being prepared financially as much as possible is the key to getting the home you want.