If you are like many other parents, you have a single checking account and a single savings account. You may have a few other accounts like a stock account, a retirement account, and perhaps a CD or other cash asset. While you may be doing your best to save for a rainy day and invest for the future, if you are like so many other parents, you struggle to pay for all of those things you really want and need to pay for. By following a few key savings tips, you may be able to establish a better method of savings for your family’s finances.
Define What You’re Savings For: Many families have a single savings account, and they save for everything from taxes and Christmas presents to the family vacation in that single account. It’s great to throw every extra dime you have into a savings account. It’s hard to go wrong when you are saving your pennies. However, defining your savings in a more details fashion may benefit you. Make a list of what you are saving for, how much you want to save for that item, and when you want to reach your savings goals.
Set Priorities: After establishing your list of savings goals, then prioritize your savings goals. Some things, like saving for taxes, will take precedence over home improvements and a family vacation. Other savings goals, however, like saving for a new car or remodeling the kitchen, may be entirely at your discretion.
Determine Savings Funds Available: Rather than saving whatever money you have left over at the end of the money, make savings a priority. The fact is that you never will get that kitchen remodeled or save up for that new car unless you free up cash and start saving for those goals. Review your budget and make cuts where necessary. Once you have determined how much money you have available to save regularly, you can then determine how to best allocate those funds so they meet your goals.
Establish Sub-Savings Accounts: You may have heard that making savings automatic by using an automatic withdrawal feature available through your bank is helpful. It is even more helpful, however, when you use sub-savings accounts to allocate money towards specific goals. Many banks offer a sub-savings account feature, and you can name each of these accounts according to the goal they are used for. For instance, you may have one sub-account called “Vacation” that receives a monthly contribution of $50. You may have another sub-account called “New Car” that receives a monthly contribution of $75.
It can be hard to save money when you are raising a family. It sometimes seems like money is flying out the door before it even clears your bank account. However, when you take steps to properly define your savings goals and to make savings into sub-accounts automatic, you will slowly but steadily work towards your goals.
Here are a few other articles written by this author:
How Positive is Your Parenting?
Helping Your Kids Through Fights with Friends
Kids and Friend Drama: When to Step In