Save money, pay off debt, and prosper. You hear these three things all the time, but somehow making it happen still eludes you. Having money troubles affects everyone in your home. Even if they don't say anything, your kids usually do know that you don't have the money you need to make ends meet. Unfortunately, this scenario plays out far too often, especially if you or your partner lose their job.
While reworking your budget might help temporarily, without definitive changes, it's not uncommon to fall into the same financial hole. In turn, your familial relationships might start to suffer. Thankfully, it doesn't need to be this way. While getting out from under the financial eight-ball might seem impossible, there are things that you can do today to turn things around.
Tap Into Your Equity
If your teen is headed off to college, a HELOC could give you the money you need to help out. A HELOC is a revolving line of credit. As you repay the balance, the available credit is replenished. Unlike traditional loans, you're able to reuse the money you pay back.
Believe it or not, there is a right way and a wrong way to save money. When you create your family budget, take note of how and where you're saving your money. Instead of simply leaving what you want to save in your checking account, you could put it into a savings account that accrues interest.
Alternatively, you can invest in an IRA, which builds wealth over time. You also need to think about how much you're putting away. If you're only saving the bare minimum and spending the rest, you're not maximizing your saving potential.
How you spend is just as important as how you save. If you're the kind of shopper who loves to go to the store and put everything you see in the cart, that's the first thing that needs to change. Impulse buying is one of the fastest ways to go into debt, especially if you have a family.
As much as you want to give your family the things they want, spending money you really can't afford to spend can backfire. Not only can it cause negative repercussions financially, but your family members may also not be receptive when you can't continually buy them things.
Does that mean you can never indulge both yourself and your family? No, However, you need to set a hard limit on how much you can really afford as well as how often you spend it. Look at your monthly income after deducting your mortgage and all other bills. How much do you really have to spend?
You also need to deduct money that you want to save as well. This remaining amount is the amount you can use to spend on yourself and your family. You can even bank it for later and then use it for a larger purchase.