Monday 23 January 2023

3 Simple Yet Savvy Financial Tips for Parents

Credit: Drazen Zigic via FreePik

A brand-new year is already in full swing, but don’t worry if you can’t decide on your New Year’s resolutions. Even though it’s tradition to set your intentions for the year on the 1st, you can wait to make goals at any time — whether that’s a few weeks from now or months down the line!

While you brainstorm, this article is here to help any mom who needs inspiration. These tips will set your family up for greater financial freedom in the future. Try one or all of them — it’s up to you! 

1. Build Your Emergency Fund
An emergency fund is essential for any modern family. It helps you cover unknown expenses that come with running a busy household. Annoyingly unpredictable things like your son’s fieldtrip, your daughter’s toothache, and the minivan’s new brake pads.

An emergency fund is an extra padding of cash you can dip into whenever your usual budget doesn’t prepare you for these expenses. 

The typical family should try to save anywhere between three and six months of living expenses in this savings account. That’s living expenses, not income, so make sure you sit down with your budget to put a number to this figure. 

If you’re finding it hard to save as much as you want, try the pay yourself first method. Set it up so that you skim savings off each paycheck before you pay any bills. This technique forces you to spend less and never skimp on your emergency fund.

2. Create Safety Nets 
Of course, moms know that anything that can go wrong will go wrong. Whether it’s your kids making a mess in the kitchen after you clean it or your emergency fund failing, these hiccups are the reality of being a parent. 

But when it comes to your finances, these frustrations can turn into real emergencies. This rings especially true if you’re stuck paying an expense you can’t afford, and your savings are all but gone.  

A forward-thinking mom knows she needs a safety net for her safety net. That’s why plenty of families rely on an online line of credit when they need help. It’s a backup of cash to support your savings.

You can compare online borrowing options easily and conveniently from your phone, tablet, or computer. Most applications are simple and quick, so you can get a line of credit to work in time for your urgent expense. 

3. Look into Insurance 
Life insurance joins an emergency fund and online line of credit as an essential financial tool that helps build your family’s security. It’s assurance that your family will be financially supported in case you or your spouse pass away prematurely. 
If you don’t already have a life insurance policy, now’s the perfect time to start looking into what life insurance provides. Most life insurance policies work much like any other insurance, whether it’s car or health insurance. For a monthly premium, you can access a pre-determined payout following an untimely death. 

Life insurance rates can vary dramatically. However, the average policy is usually somewhere between $40 and $55 per month. That’s less than most car insurance premiums. 

Bottom Line:
Every family needs a few things to be financially secure. An emergency fund, line of credit, and life insurance are just three things you can square up to solidify your family’s future this year.

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