Apr

10

Financial Planning for Young Families

Posted by jesstrump

April 10, 2007 |

checking.jpgOur speaker at M.O.P.S. last night shared with us a few practical ways to financially help young families get off on the right foot.  He used Dave Ramsey’s financial tips.  I want to recap what he said for those of you who are unfamiliar with Ramsey’s plan.

First of all he said the most important thing is to tithe to your church.  It’s amazing how much God blesses those who give.  Secondly, establish an emergency fund.  It’s great to have at least 1,000 dollars in your emergency fund so you can pull from that in case of a TRUE emergency instead of racking up more debt on your credit card.  Third, PAY OFF DEBT.  It’s best to start with your smallest credit card (if you have more than one), pay it off, and work your way to your credit card with the largest amount of money owed.  If you try to start with your biggest debt it is easy to get discouraged when you see very slow progress.  Once you pay off your smaller cards you can roll over the payments you were making on those and pay your larger one off much quicker.  Fourth, ADD to your emergency fund.  Try to get this fund filled with enough money to be able to live off of it for 5 months without a job.  Worst case, but often happens, you or your husband lose your job and are unemployed for a long amount of time.  This is where your emergency fund can save you from a lot of debt and heartache if it is well established.  Fifth tip is to invest.  Sixth is to save for college.  Our speaker pointed out that most colleges go up in tuition 10% each year!  Here is the thing though, don’t tell your kids you are saving.  Let them work hard for those scholarships!  Another thing is, make your kids start saving too.  It’s a good lessen for them to learn. 

You can learn more about investing, particularly investing for retirement at Empy Nest.


Comments

2 Comments so far

  1. Carla Smith on April 12, 2007 11:13 am

    Jessie,

    I missed this, but it sounds like a lot of good advice. I do, however, take issue with one point and I’d like to comment on it. It’s the part about saving for a child’s college fund! I’ve had 5 children and not one of them came with a tag that said, “One stipulation, when you accept me into your family, you agree to pay for my education THROUGH college. Deal or no deal?”
    My husband and I loved each of our children dearly, so much so that we allowed them (the first 3) to either pay his/her own way or work hard enough academically to receive help or scholarships. Our kids were also encouraged to pray A LOT and ask God for His will and provision. The other two kids aren’t there yet, but they both know that they need to have a part-time job and/or apply for scholarships. Of course, we received a lot of flack from them about how many of their friends’ parents were paying all of it for them! My question is, why? When they get their first job, are they going to come back and pay you a percentage? I would guess not. More likely they will come with their first child and want babysitting - which we, as grandparents, gladly provide!Of course, there were times we bought their books or loaned them tuition for a short time.
    By the way, the first 3 have all graduated and have jobs and are very proud to tell you they did it themselves, with God’s help.

  2. Jessie on April 12, 2007 3:29 pm

    Good tip Carla. It’s so great to hear from experienced moms!

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