By Donna Skeels Cygan
1. Hold a Family Meeting to Set Long-Term Financial Goals
Maybe you’d like to save more for retirement, set up college savings accounts for your kids, and beef up your emergency fund. To make sure your long-term financial goals actually happen, you and your family need to sit down and figure out how you’re going to get from here to there. Specifically, how much money will you put into your Roth IRA each month? What other expenditures will you need to adjust to ensure that happens?
2. Rethink What You’re Calling “Necessities”
For example, do you really need the expensive cable package with all the movie channels, or would you be able to get by with basic cable? Does your 12-year-old really need a cell phone with a data plan? In fact, extreme as it may seem, do you truly need the big house you’re living in, or would downsizing to a more modest home work just as well for your family—and far better for your budget?
3. Pay in Cash Whenever You Can
Research has shown that we spend roughly 15 percent more when we pay with a credit card as opposed to using cash. If you have to reach into your wallet and count out bills in order to pay for a meal or an impulse buy at a retail store, you might just decide that it isn’t worth the money after all.
4. Focus More on Experiences and Less on Things
From eating at expensive restaurants to making sure our homes are decked out with flat-screen TVs and sound systems, most of us don’t mind pulling out our wallets in the name of enjoyment. (And often, we don’t worry about the price tag until it’s too late.) But psychology shows that experiences are always more impactful on our happiness than things.
5. Get Real About Kids’ Needs
Stylish designer fashion. Electronic gadgets and all their upgrades. Summer camps. Traveling sports teams. Music, dance, and gymnastics lessons. Be honest: Is an alarming percentage of your budget going toward your kids’ activities and desires? And how much enrichment are your children really receiving? HBM
Donna Skeels Cygan, CFP®, MBA, is the owner of the financial advisory firm Sage Future Financial, LLC, and the author of The Joy of Financial Security: The art and science of becoming happier, managing your money wisely, and creating a secure financial future. She has been recognized numerous times as one of the top financial advisors in the U.S. Visit www.joyoffinancialsecurity.com.
