Top 5 Money Mistakes Young Families Need to Avoid

by Steve

As a young family, it’s important that you’re making the best decision for your future and the future of your loved ones. When you’re dealing with your finances, it can be confusing navigating all of the different options.

Money Mistakes to Avoid

There are many reasons to sell mutual funds.There are a couple of money mistakes that you could be making that are easy to fix, but will have an enormous impact on your family’s finances. Fixing or even staying away from these money mistakes will help lay the foundation for a secure future.

Not Budgeting

The most common money mistake that families are making are not budgeting their money. When you think of budgeting, you probably imagine your parents or grandparents sitting down with all of their bills and writing them down in an old notebook. But, it doesn’t have to be as painful as that. There are several websites and apps that you can use to make a budget as simple as a few clicks.

One of the best apps for creating a budget is Personal Capital. After you’ve created your Personal Capital account, all you have to do is link your bank accounts and credit cards, and Personal Capital will display all of your account information and recent transactions. Not only that, but the app will categorize all of your purchases into the appropriate sections. This makes it easy to see how much you’re spending on certain categories and identify areas where you can cut back on your spending.

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If you don’t know where your money is going, you could be overspending thousands of dollars every month. Because it’s so easy, there is no excuse to not have a budget.

Not Having Insurance

Another common money mistake is nothing have quality insurance plans in place. Buying insurance is not the most fun purchase that you can make, but it’s one of the most important. Life insurance is one of the insurance policies that families typically skip buying, which could be one of the worst mistakes that you could ever make for your loved ones.

If something tragic were to happen to you, and you didn’t have life insurance, your family would be left with all of your debts and other final expenses, which could leave them with a mountain of bills. Once upon a time, buying life insurance was a long and complicated process that would take several weeks or longer, but not it’s never been easier thanks to sites like Haven Life.

Haven Life is only one of the dozens of different websites that you can go to for a one-stop shop for life insurance. You can calculate what your life insurance needs are and apply for insurance coverage in 20 minutes. Some qualified, healthy applicants don’t need to take a medical exam, and you can be approved for an affordable life insurance plan in a matter of days. This is one of the easiest and quickest ways to get the insurance protection that your family will need if something were to happen to you.

Not Investing

Investing your hard-earned money can be a scary job, but investing is the best way to ensure that you’ll have the money that you need to enjoy a comfortable retirement in the future. If you’ve never invested before, you may not know where to start, which is why sites like Betterment have done so well. Betterment is one of the best places for a young family to start investing their money, without having to pay the expensive fees of an investment professional.

With Betterment, all you have to do is create an account, set your financial goals and risk preferences, and Betterment’s robo-advisors will handle the rest. They used advanced algorithms that will invest your money in various places to give you the best return on investment possible based on your goals. They will even continue to automatically reinvest your money as your account continues to grow. All you have to do is make deposits and watch your money grow. Nothing could be easier.

Not Having an Emergency Fund

You never know what life is going to throw at you, which is why it’s important to also plan for the worst. While you can’t predict the future, you can set aside money to prepare. One of the best ways to do that is to have an emergency fund in place.

An emergency fund is a specific amount of money that you’ve set aside (preferably in a different account) that you won’t touch unless you’re faced with an unexpected expense, like your car breaking down or a hospital bill. An emergency fund will give you the money to face tomorrow’s challenges without having to go into debt.

Not Saving for College

If you have kids, you’re going to be facing tuition costs one day, and if you didn’t know, college is expensive. Very expensive. It’s important that you start saving today to give you kids’ the help they need to further their education. It can be scary starting to save for college, but there are a couple of different plans that you can use to maximize your money.

One of the best ones is a 529 college savings plan. These plans are sponsored by states or college and allow you to save money and get several tax advantages as long as the money is used for educational purposes. Every state is different in the way that the plan is operated, but regardless, they are the best way to save money for your children’s higher education.

Family and Finances

Money is what makes the world go round. It’s important that you’re making the most of your money and planning for the future. Not having a financial roadmap will leave you stranded with a mountain of debt. Luckily, thanks to the Internet and apps, taking control of your money has never been easier. Making a few simple changes could prepare you for the future and give you the money that you need to enjoy it.

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About Steve

These articles were written by Jeremy. If you would like to write an article for Money Q&A, please visit our Guest Posting Guidelines page.

Steve has written 29 articles on Money Q&A. Learn more about Money Q&A on Twitter @MoneyQandA and @HankColeman.

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