My Personal Finance Blog

One of the most important ways of keeping your family safe and secure is to learn how to properly manage the family money. Balance your budget, trim your spending and teach your children about proper money management.

All parents want to provide for their children, to give them good lives. Not everyone has the same views of what a “good life” should be, but most people would agree that keeping your children protected from difficulties and hardships is part of it. No one wants their kids to go without.

Without sound financial knowledge and money management, it can be difficult to live this type of secure lifestyle. The amount of stress that can arise from trying to provide for your children can make your life miserable, not to mention the fact that it’s a poor lesson for your children. Working too hard to give your children too many “things” is not the right answer. You need to spend time with your family so they know they are loved.

Examine Your Money Concerns

There are many places where you can find money problems in the family. Perhaps your spouse is spending more than is reasonable, or there are unpaid bills piling up. Do you just generally not have enough money? It could be that you do make enough, but you are spending too much to provide fad gadgets for your children. Another possibility is that your money is being wasted to keep up appearances with your neighbors. These problems can effect your marriage and your health. Divorce is often the outcome of ongoing money troubles, so your family can truly be at risk when your are not managing your money properly. Arguments about how you should spend your money, what bills are outstanding and other money issues are a huge stressor on a family.

At the root of the problem is usually a lack of money knowledge, which can lead you to feel powerless to keep things managed. By learning some money management skills before things get out of hand, you can save yourself some of the potential stress of serious financial difficulties.

By taking that step to start becoming more financially responsible, you are going to save your family the tension and stress that can come with later hardships. Don’t wait until it’s too late.

To learn more about managing your family’s money check out Family Money Management. You will also find resources on teaching your kids and teens about money.

Are you a baby boomer who has neglected doing retirement planning? If your answer is yes, it’s time to wake up, wipe the sleep from your eyes and realise that you may soon be faced with a harsh new reality.

The choice is yours, either have your retirement affairs in order or potentially leave the financial burden of your retirement to your children. Drift into retirement at your peril. It’s going to be a long haul exercise… so it will be better to be prepared.

On 1 January 2011 the first baby boomer will turn 65 and this generation will start it’s next significant phase of life. Described as a “a pig in the snake” this demographic extreme will have a major impact on the world.

For a long time retirement was blissfully perceived as being a delightful transition from responsibility and the cost of children to the tranquil financial and physical freedom of retirement… to the wonderful world of life after kids at home (LAKAH)!

For many that dream is becoming a nightmare. The world has changed. Retirement is not what it was for your parents. And unfortunately hope is not a winning strategy.

So take some time out of your hectic (or procrastinating) life and start your retirement planning by considering these 6 questions:

1. What exactly does retirement mean to you? Will you continue working by choice, a “nevertiree,” or will you be an unfortunate “fortiree,” forced into retirement at the arbitrary, compulsory age with inadequate financial means. If you plan, or have to, work, what will you do? The same job or head off in a new direction?

2. What lifestyle do you plan to live and how do you plan to rebalance the various aspects of your life? Working, family, recreation and “giving back” by working for a charity or in a voluntary capacity.

3. Do you think you have, or will have, enough money to retire? Enough to meet all your objectives in terms of lifestyle, legacies, and contingencies for the rest of your life? It’s said that money can’t buy happiness, yet not having enough money can certainly contribute to unhappiness.

4. Are you considering relocating? Will this be by choice or necessity? What are your considerations? Same town, same state, same country or a move overseas?

5. Do you have, or foresee, any potential health problems? If you don’t have adequate money there will be growing stress, your health may suffer, costing you more money and you’ll be in a downward health spiral.

6. If you are fortunate enough to have adequate financial resources for your retirement, have you thought about your retirement purpose? It seems pointless having lived a life of successful achievement to then drift into a meaningless existence… just waiting to die!

Hopefully through retirement planning you’ll be in a position to have a “good” retirement. Knowing what you want to do with your life and having sufficient financial resources. The alternate is a “bad” retirement done for the wrong reasons like just being sick and tired of work, all the friends are retiring, you’ve reached the arbitrary age, or merely the hope that you may be okay financially.

Retirement planning should be a meaningful ongoing process, one in which all the elements of retirement are considered and discussed. Then regularly updated and tweaked to account for the unexpected events that will certainly be faced.

Saving money for retirement can be easy or difficult
depending on your current salary. If you are like 75
percent of the American population, earning just enough
money in your current job to meet your monthly bills, then
it’s time to do some serious thinking on how you are going
to live when you retire.

Social Security isn’t going to meet all your monthly
payments. That is, if Social Security, or some revised form
of it, still exists when your day of retirement arrives.

Here are some tips on how to save today for your future. No
matter how little, or how much, you earn today.

Estimate how much you must save to give you the income you
know is necessary for you to retire in comfort.

Experts suggest that you will need an income equaling about
75 percent of your current take home pay. Be sure to
estimate a rise in inflation which has historically been
about 5.3 percent per year.

Figure out how much of your current salary will need have to
save each year to achieve your retirement goal by counting
backward from the year you plan to retire to see how many
years you have before retirement. Include the possibility
of being on a fixed income for as long as 20 or 30 years.
Depending on how many years you have until retirement a U.S.
Treasury bond that guarantees six percent interest might be
considered, while stocks might have the potential for a
much higher return, but has a much higher risk of loss.

A financial planner, stockbroker, or an accountant, can
offer guidance, expertise and access to knowledge about
almost any type of investment or retirement planning
concerns.

Spread your money out over a variety of investments. Some
will prosper while others may fail.

Set up an automatic draft from your bank account from your
paycheck so that a portion of your income goes directly into
your retirement funds.
Pay off major debts, such as home mortgages, college loans
and other significant cash-flow drains, as quickly as you
can.

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A common financial goal for which you will need to build a personal superannuation fund gradually is to save up enough money to live comfortably in retirement.

How it works

Like a long term savings plan, personal superannuation works where you put money regularly into a fund managed by a super provider, typically a bank or investments company. The money that you invest will need to stay in the fund until you reach retirement or when you begin your transition to retirement, usually after a specified minimum age.

In the meantime, your money will be invested in various assets such as property, shares of stock, cash and other financial products, along with the contributions of other members of the fund.

Advantages of a super fund

Some personal superannuation providers also offer additional benefits such as insurance coverage and total and permanent disability insurance, and in some cases, even income protection coverage. Financial planners recommend obtaining additional protection in case of emergency because you’ll be able to access your contributions only after retirement age.

Australian laws encourage people to invest in a retirement fund by providing attractive tax incentives such as imposing a lower tax rate of 15% on your super fund contributions and its earnings. Additionally, you are allowed to deduct the full amount of your contributions from your gross earnings, effectively reducing your taxable income.

Investing in a super fund also takes care of the hassles of monitoring assets and their earnings, keeping accurate records and paperwork, and compliance with super laws all of which require much of your time and skills if you’re doing it on your own.

Diversified assets: With the unpredictability and volatility of financial markets nowadays, the best way to secure your funds against huge losses is through a diversified asset portfolio. This means spending the fund on different companies, different sectors of the market and the economy. Most funds will issue a prospectus describing the investment strategy and the asset mix consisting of safe investments like cash and bonds as well as capital growth investments such as property and shares.

Investment strategy: When choosing a super fund, make sure that the fund’s strategy meets your goals and needs and exposes your money to a degree of risk that you’re comfortable with. Most funds are invested in a diversified portfolio and are professionally managed to spread risks and prevent serious losses.

The amount of personal superannuation you’ll need for your retirement depends on your individual needs so it’s best to consult a qualified and experienced financial planner who can calculate the right amount of contributions and the appropriate fund that is suited to your circumstances.

Family financial planning is perhaps the most important part of the happiness of a family. One cannot have a happy family if one has to constantly worry about money. That’s why it is important that parents and parent-to-be understand how to plan their family finance in advance.

The term “family planning” often used interchangeably with the words “birth control”. Family planning involves the planning of the birth of your children at chosen times and the spacing of births a few years apart.

Having a good plan before marriage can save a family from lots of unexpected events. The couple will have time to focus on their work and their job and save enough money before having their first baby.

Having children less than 2 years apart or more than five years apart can affect the healthiness of the mother and the children. And by having too many small children the parents lose the ability to educate them to their fullest. The parents will not have time for each kid and some kids will feel neglected. As parents, we have the responsibility to provide food, clothing, education and shelter for our children. By having children at the right time, we are at our best to provide them what they need.

We can use many contraceptive methods to prevent unwanted pregnancies. Knowing and recognizing the importance of birth control is the first step to family finance. There are many organizations that will provide sexual education as well as free or inexpensive reproductive health care around the world so that even low income families have a chance to plan their family finance.

Family financial planning plays an important part in the success of any family. Before having your first child, you should plan well the resource your need to educate the child and any subsequent children to the best of your ability.