Having a family is amazing, but it is also expensive. You have to buy groceries, pay for clothing for your children, handle medical expenses, and more. Making the right financial decisions will give you access to the funds you need to keep yourself and your family happy. Here are some easy ways to improve your finances:
1. Find More Affordable Auto Insurance
Car insurance can get expensive, especially when you are insuring multiple vehicles. People who switch to USAA auto insurance save an average of $707 per year. You can get a discount for maintaining a good driving record or taking a defensive driving course. Teen drivers can also get a lower rate for good grades. There is no fee for using a payment plan and you can add roadside assistance, accident forgiveness, and reimbursement for car rentals. Active U.S. military members, veterans and their adult children can join USAA.
2. Pay Off Your Debts Quickly
To avoid charges from interest, you should pay off your debts as fast as possible. For example, someone with a $1,000 balance on a credit card that has a 15 percent interest rate will pay a total of $1244.90 if they make a $35 minimum payment every month, and bringing the balance back to zero will take three years. Paying that debt in a few months will reduce additional expenses to less than $20.
You should put as much cash as you can toward student loans, credit cards, mortgages, car loans and other debt. When possible, refinance for a lower interest rate or use a low-interest loan to consolidate multiple debts into one easy payment.
3. Save For Retirement
By saving for retirement now, you can keep your family comfortable after you stop working. You will have the money you need to travel, spend time with your family and have fun.
If your employer offers a 401(k), you should take advantage of it. The company will remove the amount you choose from your paycheck every month, and you will not need to pay taxes on that income until you retire and start making withdrawals. Many businesses will even match some or all of your contributions. However, you will only have access to the funds your employer adds if you work for them for a certain amount of time.
You can also deduct payments to an Individual Retirement Account (IRA) when you do your taxes. Like a 401(k), you will not have to pay taxes until you start making withdrawals. For both types of accounts, you could have to pay a penalty if you start using your savings before you turn 59 and a half. However, there is no charge if you are paying for many medical expenses.
4. Teach Your Kids About Money
If you help your children learn about money now, they can use that knowledge to keep their finances in good shape for the rest of their lives. When you take your kids shopping, you can set a good example and conserve your cash by using coupons, comparing prices, and waiting for sales to make large purchases.
Many people also pay their kids for chores like mowing the lawn or vacuuming. That way, they can encourage their children to save for things they want, such as a new video game or a fun toy. To help your little ones learn how interest works, open a savings account for each child and let them contribute.
By choosing good car insurance, paying off debts, saving for retirement and teaching your kids about money, you can improve your family’s finances. Making the correct choices now helps you be sure that your loved ones will have the money they need later.