Family Savings

Family Savings

Putting away money towards family savings is possibly the hardest financial action a family or individual attempts to do. No matter how hard we try to manage our family budget, no one ever seems to be happy with the amount they can put away into their family savings accounts.

Determining your Monthly Family Savings Amount

Knowing how much to put away in family savings is always the most difficult decision to make, especially if there are two wages going into a savings account and one person makes more than the other. Deciding on an amount to put into your family savings account can best be made by looking at a family budget. Family budgets put together how much you earn in a month and what expenses you have. Family savings is usually a category in family budgets. To learn more about family budgets, or to create one yourself, check out the family budget calculator or our blog on How to Set up a Family Budget.

Use the following tips when determining how much family savings to put away, based on your family income and expenses:

  • Keep track of family spending on a weekly basis as opposed to monthly – this keeps not only your spending but your savings on track.
  • Take out a certain percentage of your paychecks every pay period. Do not take more or less unless there is an emergency. This keeps your savings steadily increasing at a rate you can keep track of.
  • Only put into savings what you can afford to save! This might sound pretty self explanatory but learning how much to put in is of vital importance in using your family savings to the best usage.
  • Consider putting all your taxes into your family savings accounts – even the kids! When you get those fantastic returns from taxes, put them all into one place.

Keeping your family savings on track is the best way to go on that family vacation, pay for your children’s college tuition, and buy new (used) cars.

Include the Children in Family Savings

Experts agree that children recognize and understand money matters from the actions and reactions of their parents. Discussing money – where it comes from, how to get it, how much of it you get – with children at a younger age will not only help children understand the value of money more, but they will be on the path to understanding family savings.

Engage children in ideas about how the family as a whole can save money. Encourage the children’s input and participation. Teaching Children the Value of Money dives in deeper to including children in the family savings discussions.

Retirement Savings Start with Family Savings

Through your family savings are the retirement savings you and your spouse have automatically deducted from your paychecks. With people living to be older and the time of retirement looking to be longer than it was in the past, it is no wonder that many economists are panicking that in 2008 nearly half of the 401(k) plans in the U.S. lost 30% of their savings.

To prevent the almost inevitable scare of family savings in retirement there are things one can do even if they are in the beginning of their career.

  1. Start your retirement savings as early as possible
  2. Invest as soon as you have the money – remember to diversity your investment portfolio
  3. Save for retirement in your family savings accounts as well as your company 401(k)

For more information on retirement savings, check out www.RetirementFinances.com.