If you are like many Americans, the recent economic downturn has thrown your family budget for a loop. Many have readjusted their spending habits to such an extent that there is now a new normal. For example, they no longer shop as much as or where they used to and items that were previously considered to be necessities have been relegated to the “can’t afford” or “not needed” category.
If you think these are temporary changes, think again. Many economic analysts feel that these new attitudes are here to stay.
You probably know someone who has been laid off or personally impacted by these challenging economic times. And even if you have been fortunate enough to remain employed, you may have been affected by the fallout from declining retirement plan balances.
So to help with these heavy financial times here are a few suggestions to help you take stock of your overall economic picture, and long-term financial security.
Tip #1: Determine what is really important
Take stock of what is really important to you and your family—is the newest electronic game system or cell phone more important than creating a secure financial future?
Start by developing your family’s mission statement. Simply write out what is important to you as a group. Be sure to include what your long- and short-term goals are, and what you are willing to give up in order to make those goals a reality. Don’t forget that along the way, you may still want to decide what little luxuries your entire family can enjoy that you want to keep in your budget – since these can help you feel less deprived and may even save you money in the long run.
Tip #2: Cut back, even if it hurts (a little)
Figuring out what is most important to your family from a financial perspective is a smart move –and a good decision for your long-term financial security. Making even small sacrifices in your spending can help you meet your goals. And don’t overlook the bigger-ticket items you pay for every month, such as your cable TV/Internet subscriptions and car insurance either. Making minor adjustments to these items can free up more dollars than you might imagine, and play a significant role in helping you fund your family’s long-term financial goals.
Tip #3: Become a dedicated saver
If you are like many families, trying to juggle financial priorities can make saving extremely difficult. Successful savers use the concept of paying themselves first whenever they receive a paycheck. Over time, adopting that one smart move can help you reach your financial goal of saving for a car, a vacation, or whatever is a priority for your family. To help make it easier, check with your employer to see if you can have part of your pay automatically deposited into one or more savings accounts. It can make saving automatic—and nearly painless.
Tip #4: Run your numbers
Do you know if you are on track with your current disability coverage, life insurance, and retirement savings plan(s)? In other words, will these important items provide you and your family with the amount of financial protection you’ll need – when needed? Don’t wait until it’s too late. Taking the right steps today can help to ensure a better financial future for both you and your loved ones.
Tip #5: Get the help you need
When it comes to Tips 1 through 4, you may feel you need some assistance. Whether you need help in just one area or all four, start looking at your future through a new lens – one that has your family’s financial goals in focus, with a plan to help you get there. Contacting a financial professional can help you put these tips into action, start you in the right direction—and put your financial dreams on track.
Image Credit: Happy Bandits