Not everyone’s a financial guru, but most of us manage to get by pretty comfortably through the start of our adult life. When you throw a house and kids into the mix though, things become far more complicated. For the first time in your life, you have people who depend on your ability to keep up a steady income and deal with any financial challenges. The future’s unforgiving, so here are some things you must do to keep your family financially secure.
The first order of business should be starting an emergency fund, giving yourself a quota for saving into it, and sticking to that quota. It can be pretty tough to stick to a given budget, mainly because there’s so many variables that can affect it. Insurance premiums, car payments, and the general fluctuations of the economy can all throw your budgeting into the air. In times like these, it’s very important to have an emergency fund you can fall back on. Having six months’ salary stashed away is usually enough, but you may have certain factors which will mean you need more. If you have small children, for example, you may need to have a little more of a cushion when they’re not able to bring any money into the house. It’s obviously hard to maintain an emergency fund when you haven’t got much money to work with. Still, starting small is better than having no emergency fund at all.
Secondly, understand and acquire all the insurance you could need in later life. You’ve probably got car insurance, home insurance, and so on, but are your policies really keeping you as protected as they could be? Car insurance is notoriously variable, and it’s pretty common for people to carry on with a poor policy out of ignorance. Other people neglect certain kinds of insurance that they think they’ll never need. You may not have disability insurance, for example. What would happen to your finances if you were suddenly disabled and couldn’t work anymore? Even if you think you’re covered for everything, it’s important to look over your policies regularly and see if anything could be improved. You can read a handy article on this here: http://genesage.com/100000-life-insurance .
Finally, tackle your debt. You may have some big plans for a nest egg that will see your kids through the rough parts of adulthood. While you’re throwing all these plans together, remember that nothing will screw them up faster than having a massive debt hanging over your head. I know that paying off debt is easier said than done, and now that you’ve got an emergency fund on the go it’s going to be even harder. However, the sooner you start paying off debt the sooner you’ll be able to wave it away! To start with, pay down your balances with the highest interest rates. Even when paying off these smaller amounts can give you a massive sense of achievement, and make the next one so much easier. You can find a handy tool for this here: www.whatsthecost.com/snowball.aspx.