8 Ways to Start & Maintain a Family Financial Safety Net

It can be hard to plan for the future when you’re focused on just getting your busy family through the day, but in between all the kid wrangling, laundry folding, and work commuting, it’s important to not lose sight of the larger picture. If you’re living paycheck to paycheck and constantly worrying about the next unexpected hit to your bank account -- or even if you just want to breathe easier knowing you have more moolah in the bank to cover college and retirement -- take a look at these tips to help you build up savings that will not only get you through emergencies but also lay a solid financial foundation for the years to come.

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1. Make saving automatic. It’s harder to spend money you never see, and so for some people that means the best way to build savings is to have a set portion of their income go directly into a savings account. Whether you’re saving a little or a lot, every bit counts and will get you closer to your goal of financial security.

2. Know what you spend. Setting up a budget is an obvious technique for taking control of your finances, but if the idea of suddenly restricting your spending makes you nervous, start small by simply keeping track of where your money goes for several months. If you’ve never taken stock of your overall spending trends, doing it for the first time can be life-changing, and sometimes just taking a hard look at exactly how much money you devote to coffee or random treats for the kids can inspire you to rein yourself in. Then, when you’re ready to set up a serious budget, make sure you prioritize savings, both for short-term and long-term goals.

3. Set specific goals. It’s impossible to hit a target that doesn’t exist, so stop aiming for vague objectives like “have enough money to feel secure” or “maintain an emergency fund.” Instead, put real dollars and cents into a statement about how much you want to save, by when, and for what; saying “I will save $1,000 by December 31 for my daughter’s college fund” is a clearly defined, affirming goal you can set your sights on. Adjust the details of your goal so you can be successful.  

4. Record your sacrifices. If you switch from eating out to packing your own lunches, or you commit to giving up a subscription box or every other manicure, keep a tally of how much money you’re actually saving; it’s evidence that your sacrifice is really making a difference, and seeing the numbers add up before your eyes can help motivate you to keep going when all you want is fast food and a pre-polish hand massage.  

5. Get everyone involved. It may not make a huge difference in your overall financial profile if your kid contributes $1 to the family fund every month, but it will improve his or her financial literacy and make smart money management a lifestyle you work on together. Changing your family’s attitude about and relationship with money can help you stay on track with your specific goals when the going gets tough. 

6. Find hidden income. Sometimes the key to greater financial security is not saving more but making more. If you’ve eliminated frivolous expenses, started couponing, and shopped around for the best deal on car insurance but are still not meeting your savings goals, it’s time to think outside the box and find ways to bring in more income. Can you take on extra work? Monetize your hobbies (maybe selling your knitting online or teaching piano lessons to neighborhood kids)? Earmark that bonus income for specific savings categories so you can track and celebrate the difference you’re making with that extra effort. 

7. Invest. You work for your money, now make your money work for you. Investing doesn’t have to be risky, so don’t immediately write it off as something only the very wealthy can afford to do. Once you have a solid emergency fund and a working budget for your regular expenses, look into low-risk ways to enter the market and make your money grow. And remember, saving for retirement and your kids’ college expenses are investments, too.

8. Get professional help. So many of us are self-taught when it comes to money management, and this means that in addition to all the things we know we don’t know, there are dozens of additional things we don’t know we don’t know. Hire a pro to help you put plans in place for things like college savings, retirement, and life insurance so you can start building a secure future today.

 

If you need personalized money advice, Allstate can connect you with a Personal Financial Representative today.   

 

Image ©iStock.com/KatarzynaBialasiewicz

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