5 Money Tips Families Should Follow in 2015 -- From Financial Experts!
Experts tell us what to do to start the new year on the right financial foot!
By: Heather Chaet
As 2015 kicks off, have you made a little list of resolutions? Maybe you are kicking off a new exercise routine or cutting back on the amount of sugar in your diet or vowing to get a solid eight hours of sleep each night. All of these goals are great, but what about the goals for your financial health? Jan. 1 is a perfect time to get your bank accounts into shape. We chatted with some financial gurus who shared the most important money advice they give families to start the new year.
1. Talk about money regularly. “All too often, people aren't actively discussing their financial situation when in a lucid, non-emotional state,” says Ed Vargo, private wealth manager. “Whether single or in a committed financial relationship, it behooves people to discuss their financial affairs in a deliberate, non-emotional way. I stress ‘non-emotional’ because often times people discuss money in the heat of the moment or the conversation deteriorates and becomes overly emotional.” Vargo suggests establishing a set time to talk about money issues, such as Sunday morning over coffee.
2. Set three specific financial goals. Vargo follows up his first tip with this next step. “I don't care how big or small the goals are, the important point is they are specific. People aren't very good at setting goals in general, and are even worse at setting specific, measurable goals. All goals must be specific and measurable,” says Vargo. “Avoid goals such as the vague ‘I want to get out of debt.’ Instead, say, ‘I want to pay off XYZ credit card by the end of the year. I will do this by setting up an automatic payment of $250 per month, which, if left unaltered, will have the debt paid off by November.’”
3. Update all legal forms and documents, especially insurance policies. Financial consultant Jason Tate has been in the industry for 16 years and offers this piece of advice for the start of a new year. “It is a great idea to update all beneficiary forms and designations for your insurance and investment contracts. These forms must be absolutely correct at all times, so the beginning of the year is a great time to complete this essential review.”
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4. Start to give your kids a solid foundation of how money works. “Without a doubt, the smartest things families can do with money is begin teaching their children (no matter the age) how to use it properly,” says Tracie Shroyer, author of Investing in Your 401K Kid. Even with kids as young as 3, Shroyer says incorporating a financial literacy component to your everyday routine allows your children to learn essential life skills. “In 2009, after my husband lost his job, and we saw many friends and family losing their jobs and homes, we determined that people lacked a basic understanding of how money works. We wanted to change that for our kids. Each of our kids is given an allowance to spend monthly on all of their expenses. This is money we had always spent on them anyway, but now they determine how it is spent.”
5. Figure out where your money goes. “It's the critical first step,” says certified financial planner Dan McElwee. "Families get bombarded with financial advice around the new year. Budgeting, paying down credit card debt or student loans, and creating an emergency fund often rank at the top. Our advice this year is a little different: Know what you spend and how you spend it,” says McElwee. “Before a budget can come together, funds can be put aside for a rainy day, or extra money can be put towards debt, you must know where your current income stream is going. Track your expenses. Be honest about your actual spending figures."
What financial resolution are you making in 2015?
Heather Chaet documents her mini parenting successes, epic mommy fails, and everything in between for a plethora (love that word!) of publications and websites such as CafeMom, New York Family, and AdWeek. While her online persona is found at heatherchaet.com, Heather lives in New York City with her film director husband and one insanely curious, cat-obsessed daughter.
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