3 Financial Tips for New Families

New reports find that nearly 51 million US households don’t earn enough to afford a monthly budget to cover food, housing, healthcare, and transportation. That is unfortunate. That’s why those who can save should be doing everything they can to do so. This is especially true for new families.

Here are a few financial tips to help you get started.

Set aside emergency money

“One of the reasons people do not have emergency funds is misplaced optimism. People think that if they are healthy, they will stay healthy. If they are employed, ditto. The car will keep running, the AC won’t break down and, since everybody’s a better-than-average driver, there won’t be any accidents.” This according to a report from The National.

And there is some sense to that. Behavioral scientists refer to this delusion as recency bias. Basically, people believe that whatever happened in the recent past will continue to happen indefinitely. So if everything is going well, people think that will always be the case.

The sooner you realize that emergencies are bound to happen, the better. And when you do, you should make changes on how you approach your finances.

You can start by automatically pulling savings from your payroll account to an emergency fund account. If you don’t have one, set one up. CBN reports that an adequate savings account should have three to six months worth of living expenses.

Use tools to help you save

There are many resources available that are designed to help you save money. Digit is an app that can store money from a checking account to your savings account based on your spending habits. Some tools like Credible let you refinance your loans so you get lower interest rates.

There are plenty more out there. Find one that suits your needs.

Changing lifestyles

You now have a family to care for. You can’t run around like you once did when you were single. There is a need to change your lifestyle if you want to save money.

Used to dining out? It’s time you learn how to cook. When grocery shopping, you need to be more organized. And when you can, use coupons. Tracie of Penny Pinchin’ Mom fame has an excellent post on where she finds her coupons.

You should also start eliminating services that you don’t really need. Why spend money on cable television when you watch everything online? Do you have a gym membership you don’t use? Nix it. Still paying for a landline when you’re constantly on mobile? That makes very little sense.

Bloomberg reports that the budget share for nonessential items has reached a 17-year high. We’re definitely hung-up on buying stuff we simply do not need. All of us need to make changes if we want our families to have a more stable, financially secure future.

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