Debt is one of those things that keeps your family from achieving its potential. All families have short- and long-term goals. But debt, for the most part, gets in the way. Whatever the goal might be, a vacation, a new car, a home, or just simply a happy life with your loved ones, it will be harder to achieve it, if your family is deeply in debt. In fact, even if you only have a few thousand dollars in debt, which is way less than the national average, that debt can equate to a few hundred dollars every month in credit card payments, or payments to a second mortgage or a debt reconciliation loan.Debt is tricky, easy to get, and hard to get rid off. But whatever the case might be for you and your family, and no matter where you are in your fight against debt, consider these few tips to help you along the way. Click To Tweet
Families that practice some, all, or even more than these tips, can always be financially solid, debt free, and saving for future generations.
1- Learn how to live with less than you make.
I think this is definitely the most important tip that anyone can give any family (especially a young family) or any individual for that matter. Live below your means. If you make $3,000 a month, learn how to live with $2,000 and try to save the rest. Families that practice this lifestyle usually do very well in the long run. Remember saving is not a sprint, it is a marathon and it takes hard work for a long time. The faster you start, the more you will save.
2- Have an emergency fund.
This is the second most important financial goal for a family that wants to be debt free. Most of the debt that people put on credit cards are usually charges from unexpected life situations that are frustrating and annoying to say the least. The car breaks down, a trip to the clinic because of a cold, a broken appliance, and the list goes on and on. Have a plan for these life mishaps. We have an article about starting an emergency fund on our finances 101 series. If you have never done one, start there, that can help you get started.
3- Automate your savings.
This one is tricky, because automation looks very different for every family. The point here is however, that as you are paying your debt down, or already paid everything off, you need to start maximizing how much money you save. Automated savings just helps you be consistent and efficient. Set up your 401K or your ROTH IRA on automated deposit and just forget about that money. You can do the same thing with a savings account (if you want to have some money that has liquidity) or use it as a way to keep an emergency fund.
4- Meal plan.
Does not matter if it is just packing lunch to the office or making sure that your family is eating healthy (and on a budget) families that practice this habit save a ton of money compared to families that do not. Overspending at the grocery store is a budget killer, and it is easier than what you think to do it. Plan your meals, is not just a habit, it is also a way to be healthier (both physically and financially) and it also helps your family bond.
5- Have clear financial goals.
Families that openly talk about their financial goals and why they have those goals are more likely to stick to the plan in the long run. Have goals and dreams, and make sure everyone in the family is aware of those goals. If the entire family works together, the goals are easier to achieve. If mom wants to get out of debt, and Dad continues to use the credit card for not needed items, it will be hard to be debt free. One person is going one way the other one is going on a different direction. But if both have the same goal, both can work together to get there faster. No matter the make of your family (traditional or not) the principle applies to all. Work together and have clear goals.
Here is the last tip we will give you as a bonus: always be thankful! No matter where you are in your finances, and no matter if you can say that your family is debt free or not, being grateful is a great way to stay humble. Practicing the art of being thankful is not easy, and sometimes it is easy to get caught in the hype of wanting more (bigger house, better car, more money, etc.) but if you are grateful of what you have, you will be happier in the long run.
There you have it!! A few practical tips that are practiced by families that are debt free. We at Saving For Hope believe that financial planning is just a way to break poverty cycles. Help us do so, by sharing and commenting below. Does your family have a tip that was not listed here? Let us know what you do, and why it is important to your and your family. We will love to hear form you. As always, Enjoy!!!!!!!