Personal Finance Advice for Young Families to Stay Above Water ...

Young families are in a great position to set themselves up for financial security. When you are just starting out balancing income and expenses can be a real struggle; many people find themselves in difficult situations. However, there are ways that you can achieve financial security. This is the perfect time in your life to establish a solid foundation. Following these six guidelines will help you get through the early years and set the stage for true financial freedom at a young age.

#1: Learn to Save

One factor many people overlook is the concept of saving money. Spending money on bills and other necessities is inevitable. However, true financial security means planning for the future. If you haven?t done so already, open up a savings account and dedicate a small portion of your income to it. The amount can be as little as $50 per month-it all adds up in the long run. Don?t worry about low-interest payments at this point, just get in the habit of putting a percentage of your income aside for the future.

#2: Budget!

You absolutely must know how much money is going out on a monthly basis, compared to how much money you are bringing in. You must keep on top of your finances. Organize your bills and keep track of your expenses. Knowing the numbers will allow you to make smart economic decisions. The little things add up quickly, the pack of gum at the check out counter, that bottle of water, and a fast food meal can easily set ck $10. Maybe not a big deal at the time, but over the course of a month it could mean the difference between stressing over a bill instead of a relaxing night at the movies.

#3: Wants vs. Needs

It is vital to know the difference between ?wanting? and ?needing? something. This simple practice can be put into use virtually anywhere, especially when it comes to grocery shopping and clothes shopping. If the item is not going to contribute positively to your household or is something that will always be available, put it off until you have the disposable income to afford it.

#4: Set Goals

Having goals in place will make managing your finances much easier. Whether you want to take a vacation, purchase a car, or pay off a student loan, lay out the steps needed to make those goals a reality. State the goal and then list the steps to achieve it. When you are tempted by an impulse opportunity weigh it against the impact it will have on achieving your goal.

#5: Afford Your Lifestyle

The money you spend should contribute to living comfortably and within your means-not beyond it. Spending just to purchase the latest ?toys? or to keep up with the Joneses is the quickest way to lose your hard-earned dollars in a short amount of time. Accept where you are currently while you work and save to improve your circumstances.

#6: Don?t Rely on Credit Cards

Regardless of whether you are pulling in a large amount of income, do not place purchases on your credit card that you don?t have the funds to pay cash for. You will have to pay it back sooner or later and the later you pay it the more you will owe. Stick to essential purchases when you?re strapped for cash, such as gas or groceries. There are smart ways to use credit cards to your advantage, but these require strict discipline.

Learn to save, live by a planned budget, balance wants and needs, set goals, live within your means, and don?t rely on credit cards. Following these guidelines will set you on a path to financial freedom. Regardless of your current situation, it?s not too late to reset the clock and start fresh.

Source: http://usmmasf.org/personal-finance-advice-for-young-families-to-stay-above-water.htm

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