For most families, it can be a struggle each month to pay all of the bills, buy everything you need, and have any money left over for extras. There are a few essential monthly expenses you should always make room for so your family is prepared for the future. Even though money may be tight, it’s important to plan ahead for certain situations so your family isn’t left in the cold during their neediest times.
Here are five vital monthly expenses your family shouldn’t skip.
1. Retirement Savings
No matter what level of income you enjoy, it’s best to have a consistent retirement savings schedule set up. If your budget is already stretched, look for ways to cut back on things that aren’t as important, like entertainment or cable television. Nearly one-third of all Americans aren’t saving enough for retirement. Your senior years may be more difficult if you don’t save enough money now.
2. Emergency Fund
An emergency fund is another key component of any family’s budget plan. If you already have one, you can skip this step and move on to something else. Many families don’t have an emergency fund, which could wreak havoc on their lifestyle if something terrible happens. It’s best to have at least three to six months of your family’s income saved up. When you have to dip into your fund, be sure to replenish the cash as soon as possible.
3. Life Insurance
Life insurance is another necessity all families should consider if they want to avoid serious trouble in the case of tragedy. If something happens to you or your spouse, you’ll need enough money to cover final arrangements and other expenses. Families experiencing loss get even more devastated with the financial consequences of losing an income. Protect your family by investing in an affordable policy. Talk to Columbia life insurance for more information.
4. College Account
After saving for retirement, an emergency fund, and life insurance, you can begin setting up a College Savings Account for your children. The cost of a college education continues to increase, so it’s best to start saving early. While many families may not be able to cover tuition expenses for their children’s entire education, every little bit helps. A few thousand dollars saved can help reduce the amount of money your children may need to borrow and lower their chances of getting into serious student loan debt upon graduation.
5. Vacation Budget
The last thing your family can start budgeting for is a family vacation. Even though an annual family trip is not really a necessity, making it a priority is one way to live your best life with each other. You don’t need to save up for something exotic or far away; you can simply aim for a budget vacation within a few hours’ driving distance. The key is to prioritize your time together to make more memories.
When you sit down and take a look at your family budget, be sure to look for ways to cover important monthly expenses that no family can afford to ignore. These costs may chip away at your leftover money each month, but they will also help your family be ready for almost anything.