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Four Ways to Reduce Family Financial Stress Thumbnail

Four Ways to Reduce Family Financial Stress

Insights

Tiffany Coffin, CFP®

Hard and unexpected times can be stressful. Having to worry about money in those moments can make them seem unbearable. Being prepared for the unknown beforehand can be helpful. As they say, when it rains it pours, and often-times we are hit with multiple expenses at once. For my family that was purchasing a van to fit all three of our kids as well as needing to replace all of our appliances. We lived without a dishwasher for years, and the ice maker had been out for a couple years when our stove unexpectedly turned on and wouldn’t turn off, so we decided it was time to upgrade. Although it would have been nice to do it on our own terms we were prepared so that it didn’t turn into a big stressor for us. And now I finally understand what we’ve been missing all these years by hand-washing all of our dishes!

Here are four things you can do to help reduce the financial stress in your family:

  1. Do you have enough cash on hand in case of emergency? If you or a spouse lost your job, would you be able to get by for a few months or if an unexpected expense popped up would you have the cash to pay for it rather than putting it on a credit card? We recommend 3-6 months cash. If you need to use funds from your emergency fund make sure your first priority is replenishing it.
  2. Create a budget. Now is a good time to review your current expenses. How have they changed for you over the last few months? Creating the budget is the main focus, you don’t need to put all of your expenses into a budget each month (although if you are, that’s great!), but reviewing where you are spending money periodically can help you course correct. It’s easy to spend $6 for a drink at Starbucks, but sometimes we don’t realize it’s costing us $100/month.
  3. Gain knowledge and access to all your accounts. Knowing what you currently have can help you know where you stand. This is an easy way to avoid the expense of your account being drawn negative.
  4. Discuss what your family's goals are related to money. Having common goals makes it easier to discuss money and eliminate unwanted disagreements. Often times this is the hardest step. Having an advisor to help you discuss your goals and put an action plan in place can help make it easier.

Uncertainty can lead to more stress, so we encourage you to take the time to have these discussion in your family to know where you stand financially. If you would like help navigating these discussions, give us a call. We are happy to help you!

FSB Premier

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