Gerber Life Family Times --- News and tips for familes of all ages and stages of life

Family Finances
  Plug the Leaks

Control your debt. Keep track of expenses. Pay yourself first. These are steps you can start taking right away to plug the leaks in your family finances and manage your money. It’s easy to get caught up in the day to day, with little concept of where the cash is going, especially when you use ATMs often. Bottom line: Take a good inventory of what you're spending, and then plan for the best places to cut. By getting into the habit of tracking your income and expenses, you’ll understand how much you're spending, and that can help you pay off your debt sooner.

One of the best things you can do to control your debt is to pay off credit cards at the end of the month. You probably recognize that just paying minimum payments often doesn’t cover the cost of interest. After paying off credit card debt, you can begin to chip away at other credit obligations that have the highest interest rates, such as automobile loans.

The pay yourself first philosophy is a smart one. Make saving the first thing you do with your pay--don't wait to see what you have left at the end of the month. You can also request that your employer put a portion of your paycheck in the company's 401(k) plan. That's often one of the best opportunities to save. Many employers will match a percentage of the savings. You at least want to put in enough to receive the maximum match. If that percentage is 50 percent,it's an automatic 50 percent return on your investment!

If you don't have a 401(k) plan, you can use the same strategy and do it yourself. Set up an automatic monthly withdrawal from your account that goes into a mutual fund. You’re less likely to spend what you can't see.

Another concern for families is having adequate life insurance coverage. Situations vary, but financial experts generally recommend enough insurance to cover your income for five to seven years. And don't overlook insurance for your child. With some policies, you can insure your child from infancy through puberty with a whole life policy that builds cash value. After 20 years, the cash value is equal to or greater than 100% of the premiums you paid. This gives your child a financial head start and can be a big help to her or him later in life.

By plugging the leaks in your finances, you can begin to lower your debt, lower your stress level and build confidence in your ability to plan for your family’s financial future.

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