It’s long been said that a large part of the reason for divorce is because of money, so in order to really avoid any potential family money disaster, it’s been to get out in front of it early on before it may be too late. Finances may not be first priority when a new relationship begins, but as you begin to grow in terms of marriage and children, that’s when the importance escalates pretty quickly. The days of carelessly spending should begin to come to a close, replacing with sound financial decisions that will secure your family’s future, not to mention pass along positive money traits for your children to follow in your footsteps to prepare for their future as well. It’s a lot of responsibility, I know.
Have an Open Discussion
While you may not want to reveal what your salary is, or debt you are carrying for that matter, once you are starting to date someone, but as the relationship gets more serious, it is time to bring that up. Whether you plan on sharing finances or keeping them separate, you may sign for a mortgage together so if your credit score makes for an awkward conversation, it’s still better to have that talk early on instead of waiting until you’re married with children, and then finding out when you don’t get approval for your dream home and there is a lot of explaining to do.
Create a Budget
Of course, it’s been said that two-thirds of every household do not have a budget, whether that’s because one was never created or it just sort of stopped working by not tracking, there’s plenty of opportunity for wasted money throughout the month. If you take a look at how much you’re currently spending on utilities, food, gas, and spending money, you can work on allocating certain funds to each area in how much you should be spending and try to stick to that each month. Sure, it will take adjusting, but if it adds up to extra money time and time again, then you know it’s worth it.
Have Short & Long-Term Goals
Let’s face it, save money is not fun. It would be great to go on a shopping spree, take another vacation right after you just come back from one, or go out to eat every day, but unless you have unlimited resources to funds, debt can pile up pretty quickly. By not only setting up long-term goals such as setting up an emergency fund, saving for retirement, or paying off debt, you can also set short-term goals as well so there’s reward for saving, such as a nice meal out every other week or so, or saving for a new 4k TV you’ve been wanting.
Handling the finances can be stressful, which is why you shouldn’t be alone in the matter. Of course, if you share with a significant other it’s good to both be on the same page, but even if you’re on your own, it’s nice to bounce thoughts off a family member or friend that you trust, to ensure you’re making the right financial moves. Between yourself, significant other, friends, family, or even a hired professional, there are plenty of resources available to ensure you’re making the right financial moves; it’s just on you to execute.
Don’t Borrow from Friends or Family
While it may seem like a good idea to borrow from someone you trust, whether it’s because of no-interest, or the money will be gifted to you, it’s never a good idea to borrow from friends or family. Not only does it open up your finances for discussion, especially if it’s something you’re not entirely proud of, things can get awkward if you fail to re-pay, and can open up lengthy legal battles as the other party seeks their return. Personal, home equity, or even consolidating debt to a low or no interest credit card promo rate can be a great way to pay down debt.
Ensure Adequate Coverage
When it comes to securing your family’s financial future, ensuring you have enough coverage is a great way to prepare for the worst, not to mention giving yourself a cushion. By having an emergency fund of a few months’ worth of expenses in an account, paying off debt, not to mention saving for retirement will give yourself a needed nest egg, while the proper home, auto, and life insurance can maximize that you have the adequate coverage in case of an accident, or even worse, financial protection in the event of death.