According to the National Financial Capability Study, although credit card debt has dropped, at least 40% of Americans in every age bracket still carry it, with Generation X being the biggest issue. With money flying toward debt, how can you save for your family's future?
Build Emergency Savings
You need to have emergency savings. If you don't have emergency savings and the furnace goes out (and it will), how do you pay for it? That's right. With the credit card. Put as much money as you can into emergency savings until you reach $1,000. In the meantime, pay only the minimum credit card payment. Then, pay the money that was going into emergency savings toward the credit card. Rebuild your savings when something happens. Debt-free? Awesome! Build up an emergency fund that will cover you for 6 months of expenses should someone lose a job or not be able to work for a time.
Save for Retirement
The general guideline is to save 15% of your annual income for retirement. Add to your employer-sponsored retirement plan, especially if there's a matching option. This is free money. If your employer matches your investment 50 cents to the dollar, then if you invest 10%, they'll invest 5%, which gets you to 15%.
Cut Back on Bills
Cell phone plan eating away at your monthly expenses? Have the kids contribute. They're using it, after all. It doesn’t matter if they have unlimited talk, text, and data, they can still contribute. Shop around for service and consider switching to a less costly plan. Also, ask about discounts – sometimes you can get a percentage off, depending upon your employer – and cut any unnecessary lines. Do you need Netflix, Amazon Video, Hulu and satellite? No? Consider getting bunny ears for local channels and watching everything else online. Money saved? $35 to $100 each month. Earmark it for savings.
Save for Vacation
Consider vacations an investment in your present that will reap future rewards. Time together will strengthen your family and be a time you can look back on with fondness. Even teenagers like vacations. Saving just $50 each month can lead to a vacation every few years.
Saving for your family's future means a lot of things for different people, from helping with college to early retirement. Figure out the things that are most important to you and invest in them. But start by getting out of debt. Your kids are watching. What do you want them to learn?