10 Tips for Managing Family Finances without the Stress

Family finances have you stressed? Here are some of the top tips for getting your family ready to save and spend with leisure no matter your means.

The finances of a growing family can change just as fast as the stock market. And if you don’t have any financial security for those dips and rises, the ride can feel pretty stressful. Save yourself the worry by considering these tips when managing your family finances.

1. Plan for Your Expenses and Savings First

Sit down as a family and create a budget together. Start with your income, then subtract all your necessary expenses (like bills, subscriptions, loan payments, etc.), then subtract your target savings. Whatever you have left over is what you can spend on your family’s wants and unexpected needs. Make sure everyone understands the budget and their role in sticking to it.

2. Track Your Expenses Every Month

To ensure that you reach your goals every month, keep track of all your expenses, either through budgeting apps or spreadsheets. This helps identify areas where you can cut back and save more money.

3. Stash an Emergency Fund

With families and life, there are a lot of things that can go wrong that mean you suddenly need more money, stat. The traditional way to deal with it was to stash $100 bills in books. The same idea applies today. Build an emergency fund that covers at least three to six months’ worth of living expenses. This fund can provide a safety net in case of unexpected events like job loss, medical emergencies, or car repairs.

4. Start Thinking about Retirement Now

Start saving for retirement early, ideally in tax-advantaged accounts like 401(k)s or IRAs. Even if you can’t contribute very much, make it a family goal to contribute regularly to retirement savings. You want to have enough to retire when you’re younger, not older.

5. Want to Go to Machu Picchu?

Discuss and set short-term and long-term financial goals as a family. Whether it’s saving for a vacation, buying a home, or funding your children’s education, having clear goals helps motivate everyone to work towards them.

6. Live Within Your Means

While debt is sometimes necessary, it’s also the archenemy of savings. Avoid any unnecessary debt by living within your means. That is, only buying what you know you can afford. Encourage responsible spending habits and discourage impulse purchases.

7. Teach a Course in Kid Finance

In a family, no matter who earns the money, the money goes to everyone, especially the kids. Which means they have a stake in this too. Educate your children about money management from a young age. Teach them about budgeting, saving, investing, and the importance of avoiding debt.

8. Plan for College, Cars, and Care

Anticipate major expenses such as home repairs, education costs, or healthcare expenses, and start saving for them in advance. This is easiest if you set the money aside in a separate account so that it doesn’t get mixed in with your everyday expenses.

9. Buy a New Car After 10 Years or 10,000 Miles

One of my finance professors always liked to say that you should sell your car and buy a new one after ten years or 10,000 miles. While this isn’t a finance law, because sometimes the best car is a paid-off car, it’s a great guideline for managing your expenses. You want to make sure you’re not paying more to repair a car than you would to just buy a new one. (And you might consider a new used car if you want to save yourself the insane depreciation from driving a brand-new car off the dealership lot.)

10. Review and Adjust Every Month

Life happens. And the only way to make sure you’re prepared for it is to review your family’s financial situation regularly and make adjustments as needed. If you’re setting a monthly budget, you probably want to check on how you did every month. If you set year-long goals, you’ll want to check in a few times until your deadline. You won’t reach the goal if you can’t see it and you don’t know how to get there.

Life circumstances change, so your financial plan should be flexible enough to adapt to your family’s needs.

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^{Shaelyn Topolovec earned a BA in editing and publishing from BYU, worked on several online publications, and joined the Familius family. Shae is currently an editor and copywriter who lives in California’s Central Valley.}