One of the major disputes in a family often revolve around money. I found when I got married that my wife and I had different concepts about saving money as a family. I’m more careful about spending. My wife didn’t like investing in the stock market. We used our credit cards differently.
Over time, we’ve learned about each other’s differences and how to communicate our financial strategies with each other and figure out ways of saving money as a family.
Communication is Key
I think the biggest part of building a successful family plan is communication. In this case, communication about saving money as a family is key to successful financial family planning. This means telling each other your financial goals. You’ll be surprised when you find out that you each have a different goals for your finances. The key is to identify those differences and find some common ground so that you can find better ways of saving money as a family.
Communicate before you spend money. I’ve heard stories of spouses showing up at home with a new car as a surprise. I believe firmly in talking about big purchases before you make them. At the very least, let your family feel involved in making the decision. Communication is key to saving money as a family.
Create a Budget
When you are on your own, it’s easy to keep track of your own expenses, but when you grow into a family unit, it’s much harder. There’s somebody else out there who is spending and earning money and you need to track the total. It’s all that much important to create a budget of your earnings and expenses so that you know your limits. This is the first step of saving money as a family.
There are a lot of expenses that accrue as you get older and have a family: tuition for your child’s daycare, the mortgage, health insurance, etc… You cant wing it anymore. You can create your own spreadsheet or use a service such as mint.com to help you track all your expenditures. That way you know where you can cut to save some money.
Decide How to Invest Your Money
You may not consider investing the same way as you think of saving money as a family. However, proper investments can grow your net wealth and give you more money to work with as you figure out your plans for saving money as a family.
Discuss the different kinds of investments that you’d like to consider You may find that each of you have a different threshold for risk when it comes to investing. I know that my wife feels like the stock market is a lot like gambling. So, I’ve learned to be more conservative with my stock investments and adjust the portion of my money that I put into the stock market. However, she doesn’t feel the about CD’s and mutual funds, so I know that I can put more money there. She also doesn’t feel the same fear with investments such as Lending Club, however, I am extra careful with alternative investments, so I start slowly there. The key is to find a common ground so that each of you can feel comfortable with your investments. We have the same communication when we talk about how to distribute our retirement accounts as well. Communication is key.
Talk About the Future
Have a plan for the future. When you are a family, you are making decisions for others as well as yourself. Talk about the goals that you have for the future. Where do you want your children to attend school? It’s never too late to start saving money as a family for college. How many children are you thinking of having? Will you be responsible for the care of any relatives, such as elderly parents? All of these things will affect your financial goals as a family. It’s much better to talk about these things early, rather than be surprised by a sudden unexpected expense such as a stairlift installation.
Having a plan for the future means having a goal for your money. It gives you some direction for your efforts when you are saving money as a family. You have a focus in your discussions and a strategy for your nest egg.
Develop a System
Work out a system for your family for saving money as a family as well as spending money as a family. My wife and I give ourselves an allowance at the beginning of the month. This is our spending money for when we go out with our friends or officemates. Then we have a separate budget for family related expenses. This way we each have our individual fun money and still working towards or family’s financial goals. We also try to keep to a rule about how often we eat out as a family as well as how much we spend on going out. This system really helps us stay within our budget.
Talk to an Expert
At some point, you may feel like your finances have gained sufficient complexity that you want to talk to a professional about your finances. Enlist the help of a good cpa or financial planner to help you plan your goals. A good financial planner will develop a comprehensive strategy for you. This will include your savings, investing, and budgeting for the future. If you have a bunch of stock market investments, a business, retirement account, mutual funds, (income from a blog) as well as a job, you’ve got a lot of things going on with your finances. You may want to hire a professional to help you juggle it all. Take it as a sign that you are moving up in the world.