Two people meet, fall in love, get married, have kids, and boom! They become one of the many couples who have to worry about the financial management of the family. The trusty financial book may be a good way to keep records and to plan for the future, but it is not all. There is still a long way to go, and with the increasing demands of today’s lifestyle, you may find that you have bitten off more than you can chew. Let us help you with that. Here are some of the best tried and tested ways to manage the financials of your family in a hassle free way.
1. Don’t Chase the Financial Fads
There are a lot of investment ideas that revolve around, and you may be tempted to jump on the bandwagon with the people who have described to you such great promise of the new so-and-so investment. However, it is not a good idea to invest on a referral without first assessing the actual needs of a family. Every family works in its own way, and what may have worked for a-friend-of-your-brother-in-law or a company colleague, chances are that it may not work for you. Evaluate what you would actually need in 10, 20 years from now and invest carefully in a program that will be most beneficial to your family.
2. Team Up with Your Partner for Money Managing
A one-for-all approach does not work.
There, we said it.
You need to decide the roles and rules that will be right for your family. Don’t look at other families and decide that that’s what you are going to get. Whether you decide to have separate or shared accounts, sit and decide with your partner, so that you are on the same page. As for the kids, they will adapt to the changes as long as their parents are clear about what needs to be done.
3. Be Open about Financials with your Spouse
Once you have financial plan, don’t ruin it up by going behind your partner’s back and spending on that thing you wanted for a long time, and keeping your partner in the dark. A study by Relationships Australia concluded that 30% of men and 37% of the women pointed to financial stress as the reason for their marital misery
. Being open to your partner about your spending can result in a better management, as then the money that has been spent can be saved up from other sources and the financial plan that you have decided on does not get affected.
4. Save on!
Create an atmosphere in the family where saving is encouraged. It is especially important for kids, since the new generation has tough goals to achieve ahead, and they need to be taught how to save and manage money from a young age, so that when they reach the age where they have to make tough financial decisions on their own, it won’t be something alien to them.
5. Preserve Retirement Funds
Always try to preserve what you have set aside for retirement. There may be times of emergency where you need money and the retirement funds are the only savings available, and you can withdraw from them. But try not to make it a habit. For IRA and other plans, you are allowed to make withdrawals from retirement funds at any age before 60, but if they are made frequently, you may have to face penalties and pay hefty taxes. Therefore, it is a good practice to not consider the retirement funds as a backup option.