Saving money for your family is tough. Sometimes, you find yourself envious of those who have a savings account. Have you ever found yourself having to charge unexpected expenses on a credit card because you don’t have any money saved? If you lost your job, would you have any savings to cover your living expenses?
You may really want a savings account, but aren’t sure how those who have one actually do it. Maybe you’ve tried, and just don’t seem to have anything left over each month for savings.
Financial experts across the board recommend having a savings account and start saving money, however. So how do you go about it?
Here are some tips for making saving money a part of your family budget.
Pay Yourself First
One of the reasons many families feel they cannot afford to save is that they do not seem to have enough left over after everything is paid. But what if you put money into your savings account first, and then tackled your other expenses with what’s left?
Think in reverse! It might help to make it a percentage, say 10%, of your income. You’ll learn to mentally note this so that you recognize right away that a 10,000 pesos check is actually a 9,000 pesos one.
Has anyone ever asked you how you’re going to spend a certain amount of money? Maybe it’s a pile of cash you received as a gift, a tax return, a bonus from work, or some other way that you receive money over and above your usual income.
A key to saving money is, don’t earmark the windfall!
Instead, put it in your savings account (unless you have an emergency need for it right away) and use as needed. This requires some discipline, especially if someone gives you cash as a gift and wants to know what you spent it on. But this habit of putting windfalls into the bank is a great way to jump-start your savings account.
Study Your Budget
There’s nothing like a budget to show you where you can cut back and save more money. Review all those optional expenses – cable, eating out, phone apps, Netflix, Spotify, whatever – and see where you can trim unnecessary expenditures.
Then move that money over into savings. Sitting down and talking this with your family is an effective way to go about this. Plus you and your family will be learning how to budget and use only the money that is available.
Split the Costs
When it comes to involving your kids in the family budget, include them in expenses, too. Various lessons, sports and extracurricular activities can cost a lot of money. If your child wants to get involved in something like this, have a portion of the expense (such as for equipment or uniforms) come out of his or her allowance or birthday money.
This helps not only to save money but also to encourage your kids to think before committing to an activity. Just explain this to your kids in a gentle manner so they will not be overwhelmed or feel guilty on something they want.
Saving money should be part of your family budget because there will surely come a time for an unexpected expenses. Saving money will also avoid your family from getting in too deep of debt. It has many benefits and the most important is it can provide a safety net for your whole family.