Mar. 25, 2008 - Money, Your Children and the Future
Having a family means more than just piano lessons, soccer and endless loads of laundry. It means being financially responsible. How can large families save money in a time when the dollar's worth is plummeting around the world? How do you implement money management when the economy is worsening on a daily basis? Being responsible with your loans is the first step. The second step is to simply be responsible. How does that work?
Financial responsibility means more than simply putting away a few extra dollars when it is convenient. With a large family, the question of college savings should be answered as soon as possible. How can you put away money for your family's future when you barely have enough to live on, as it is? The first thing that you need to do is ensure that any loan payments are met on time, every time. If necessary, short term loans can be used to meet this requirement, as long as they are paid off immediately. I have a friend who is scraping frantically to save for her daughters’ wedding, instead of enjoying this time of planning, preparation and last days with her at home. I first suggested a smaller, less expensive wedding, then perhaps a loan that she could pay back as the money came in.
Being financially responsible constitutes more than this, though. It means a drastic reduction in spending, for example watching movies at home as opposed to going to the movie theatre. It means looking at money differently than most of society. Our consumer driven society wants everything right now; I call it the “gimme-gimme culture.” With a family, that is just not possible. Responsibility will mean looking at each new purchase with a critical eye and asking yourself “how many hours will I have to put in at my job to pay for this?” or “Do we really need this?” You'll be surprised how often the answer is "no." While many new things are useful, handy or downright exciting, you don't need them.
Investments should play a role, as well. Putting money into investments when you have a family may sound difficult, and it can be. However, if you don't save, then your children's future might not be what it should. Your ultimate responsibility is to the welfare of your children and every financial decision you make should be geared towards that.
