Getting Your Family on a Firm Financial Footing

Economic uncertainty seems to be a fact of life at the moment. Hardworking American families are finding themselves struggling in the face of unstable incomes and mounting bills. When a family is struggling to make ends meet in terms of day-to-day expenses, it's easy for “far away” bills to be forgotten. When those bills come due, the sudden expense can be crippling. According to U.S. Census data, 12.8% of the population are classed as living in poverty. There are many more whose incomes, while higher than the amount that the government considers to be a ‘required minimum,' are still borderline compared to the expenses that they face. If you're one of the people for whom the cliché of “too much month at the end of the money” applies, try these tips for building a strong financial future:

Forming Your Financial Foundation

1) Create a spreadsheet for your essential bills

Map out your necessary, non-negotiable bills. That includes medical insurance, rent/mortgage, food, utilities, and taxes.

Even if the expenses aren't paid weekly or monthly, set aside a portion of your income every payday in an account that will not be touched so that you know those bills will be covered when they come around.

Doing this may feel counter-intuitive at first, but in the long term, you will save money by getting discounts for paying up-front on major bills and avoiding issues such as delinquent property tax.

Budgeting is a powerful financial tool.

2) Build an emergency fund

In an ideal world, everyone would have an emergency fund that is equal to 3-6 months of their usual expenses. Depending on your income and circumstances, this may not be possible.

Aiming to save up even one month of expenses is a good idea. Make sure your basic expenses are covered first.

Next, set aside a small amount of money in a fund that can be used to cover unexpected bills.

This fund will help you to avoid having to take out expensive loans if things go wrong.

3) Snowball your debts

If you have loans or credit cards, make the minimum payments on them all then add any extra funds to the highest interest accounts so that you can pay them off more quickly and save on interest. This is known as the ‘snowball method.'

Even small overpayments can speed up the rate at which debts are cleared dramatically, giving you what feels like a ‘boost in income' since your money can be put to better use than servicing debt.

4) Increase your income

The best way to secure your financial future is to earn more. Consider using free time to build skills that will allow you to take a better job.

A small pay raise can give make a massive difference to your quality of life, and opportunities are out there. Good luck!