7 Ways to Start Saving for Your Family’s Rainy Day

1. Watch Your Spending Habits

Money comes in and money goes out, but if you find that it’s more out than in, it’s time to monitor your spending habits. You may realize that you’re paying for many things you don’t actually need. For instance, if you’re paying for cable television but typically only stream on your computer, smartphone, or digital device, you potentially throw away hundreds of dollars each month. Spend three months writing down your expenses and work with your spouse or partner to plan a budget that won’t bottom out your account.

Once your budget is in order, you can begin saving, but don’t just lump all of your extra money into one account. Set aside money for retirement, college, and emergencies. It’s wise to have at least six months’ worth of expenses stashed away in the event of a health or employment crisis. Vanguard Group, a US-based financial advisory, explains that having an emergency fund established will keep your stress levels down and prevent you from overspending on a whim.

It’s not typically enough just to save money. You also want to make it grow so it can support you at retirement and help pay for the expenses associated with kids, such as college and healthcare. Kiplinger notes that young families should plan to save 15 percent of their income and start a college savings account. Also, education fund, investment bonds, and savings accounts are all viable options to help pay for your children’s university studies.

When it comes to buying a home, consider local real estate prices and trends. With the median list price of homes in Long Beach currently at $639,000, you’ll need to consider whether buying a home is a realistic option. 

Look for new income streams to supplement your family’s income. This could be anything from babysitting to mowing lawns on the side. Every extra dollar can be funneled into your investments and grown into a significant contribution toward future expenses. If you’re looking for side work, check out sites like Freelancer for freelance opportunities.

It’s fairly well accepted that you should have eight to 10 times your annual income in life insurance to help carry your family through hard times should you pass away unexpectedly. CNBC claims your family’s needs may be different and offers more advice on how to determine how much insurance you should have based on your current and future lifestyle, goals and financial obligations. In order to get a rough idea of monthly premiums, you can get an estimate by using an online calculator like this one. Keep in mind that age and health will have bearing on how much you pay. 

Consider how you can save on your car insurance because lowering this expense by just a little each month can make a big difference long term. Where you’re located may be the predominant factor in how much you’ll have to spend, but there are still ways to save even if you live in a state with high insurance rates. If you avoid accidents and traffic violations, raise your credit score, or park in a safe spot, you may be able to reduce your premiums. 

Perhaps the most important thing you can do as a parent is to teach your children about money management, even if you’re still learning. Instilling positive habits now will help them manage their own finances as adults. Even young children can open a bank account and own stocks and bonds. It’s never too early to help your child feel comfortable making financial decisions.

Finally, allow yourself to spend some money so that you and your family can enjoy the fruits of your labor while you’re still able. There’s no shame in utilizing your assets in order to live a better life. Staying on top of your finances will improve your physical and mental health and give you the emotional stability to experience the happiness that raising a family has to offer.

Financial stability doesn’t have to mean sacrificing your time and sanity and it doesn’t require a six-figure income. You can live quite comfortably on much less and still build your nest egg one dollar at a time. All it requires is a little planning!