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2020 is the year that you are going to finally take control of your family finances instead of letting your money control you. You know it’s time to get more serious and make your way to financial freedom.Here are 6 things you need to do to make that happen.
Start Tracking Your Spending
You need to start tracking your family’s spending habits. Warning: It’s going to hurt at first. When you do the work and start seeing all the various things money is spent on, you start to realize why your savings account isn’t where you would like. Create an expense tracking spreadsheet, find an app or just write it all down. Learning where your family finances are going is one of the first steps to changing where it ends up.
Start Using a Budget
Keeping a budget is not the easiest thing in the world to do, but it doesn’t have to be stressful. The key is to find a budget type that works for you and then find a system that works for you. Whether you keep your budget in a spiral notebook or create an excel spreadsheet or are more tech-savvy and use computer software or a budgeting app, find what works for you and stick to it. We currently use what is called a zero-sum budget, as outlined in one of my favorite money books, “Zero Down Your Debt”.
Create an Emergency Fund
If you’ve been “adulting” for more than 10 minutes, you’ve probably learned that unexpected expenses seem to appear out of nowhere and always at the absolute worst time. The easy way to ruin your well-crafted budget is to not plan for the unexpected. Having an emergency fund set up can help to ease the pain when life happens.
How much should you save in an emergency fund? The specific number is dependent on your family’s specific circumstances. If you are in a stable job with good insurance, 3 months worth of expenses might be enough. 6 to 12 months would be even better. what if you still have debt to pay off? Start small.
A good rule of thumb is to build up a quick $1,000 emergency fund then work to pay off your debt. As your debt disappears, continue to add to your emergency fund until it’s at a point you like. Your emergency fund should be big enough to give you peace of mind and keep you worry free as you plan to take control of your family finances.
Pay off Your Debt
Having debt is the killer of all your financial hopes and dreams. It will keep you down and will become a source of great frustration within your family. You need to make a plan to pay off all of your debt, whether it be credit card bills, student loans or another source of debt. It adds up fast if you don’t take control.
There are different ways to tackle your family’s debt. There are the debt snowball and the debt avalanche methods. We will touch on those debt management methods in the near future. Whether you chose the debt snowball, the debt avalanche or another method (the debt hurricane? I’m sure that’s a thing), create a plan to pay off your debt and dig your family out of the financial hole it’s built.
Save and Invest in Your Future
Once you have tracked every last cent, have become a budgeting ninja, have a plan in place, created some emergency relief, paid off all those bills, now you can start thinking about killing it financially in 2020. How can you save and invest money in your family’s future?
Perhaps your dream is to retire early or quit your full-time job and launch your own business. Have thoughts of building a travel fund so your family can explore the world together? Perhaps you want to set up your kids with college funds so they don’t have to struggle the way you did. These are all things to think about now that you’ve built some success financially for your family.
Sit down with your spouse and set some financial goals, both short and long term, create a plan to reach those goals, and get to work. It will be worth all the blood, sweat, tears, and brain power to make these goals happen.
If you really want to learn how to move towards financial freedom, why not join me in attending the Financial Freedom Summit? It’s taking place in St. Louis May 1st-3rd. The event was founded by Grant Sabatier, from MillenialMoney.com and author of Financial Freedom. I’ve worked with Grant and he is one of the smartest people I know on the topic of personal finance.
Your Financial Freedom Summit Pass includes:
- All Speaker Sessions and Keynotes
- Financial Freedom Summit Workbook
- Welcome Package and Swag
- Closing Party and Networking Events
Yes, you could read books, watch videos, or learn on your own, but sometimes getting away to an event in another city helps remove all the distractions so you can focus on learning and growing. There will be 50+ speakers, plus tons of opportunities to ask questions, get answers, and network with people on the ame journey as you.
2020 is the year to finally take charge, show your money who’s boss, and get out from under the financial mistakes of the past that have held your family back for so long. Take charge of your family finances!
What are you doing to make 2020 the best year ever financially for your family? Let us know in the comments below!
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