3 Tips For Fixing Your Family’s Finances
When it comes to securing your child’s financial future, one strategy many parents overlook is opening a UGMA account. UGMA accounts (Uniform Gifts to Minors Act accounts) allow you to transfer assets like cash, stocks, and bonds directly to your child’s name, all while maintaining control as the custodian. Unlike other savings accounts or investment options that are limited to educational expenses, UGMA accounts give your child the freedom to use the funds for anything they need when they reach adulthood — whether it’s for college, a first car, or even a down payment on a house. These accounts can serve as a powerful tool in building long-term wealth and preparing your child for the future, without the restrictions of traditional savings plans.
Starting a UGMA account is easier than you might think, and it’s a great way to teach your kids about the value of saving and investing. As a parent, you can deposit money into the account over time, and as the custodian, you can manage the investments to suit your child’s needs. Since UGMA accounts are considered a gift to the child, they come with specific tax advantages, allowing the first $1,100 of unearned income to be tax-free. As your child grows, they’ll have access to the funds when they reach the legal age in your state, usually 18 or 21, which empowers them with financial independence.
Useful Strategies for Fixing Your Finances
As of 2017, the average American family spends approximately $7,203 per year on food, $9,049 on transportation, $2,913 on entertainment, and a whopping $18,186 on housing. Without going into additional statistics, these numbers alone show that raising a family today isn’t cheap. Between buying your next car or just buying a week’s worth of diapers, fixing your family’s finances can feel impossible. While you might wish you could save up for the next big family vacation, you also might want to prepare for
Even though it may seem like it’s impossible to get your financial situation under control, there are a lot of useful strategies that can help you fix your family’s finances. Learn more about three top tips for getting your family’s finances in tip top shape.
1. Quickly boost your credit score
Among those who are between the ages of 30 and 39, the average individual credit score is 671. This puts most people at what is considered to be a “Fair” credit score rating. Although it is still definitely possible to get a home, car, or personal loan with this score, you can get much better interest rates by raising your score. Experts at Crediful recommend first checking your credit score to know where you stand. After doing this, you can quickly boost your credit score by paying off credit or loan balances (even small balances), paying down the amount you owe, and by disputing any inaccuracies on your credit report.
2. Automate your savings
A report by CNBC revealed that “more than half of Americans (57 percent) have less than $1,000 in their savings accounts,” and that 39 percent have no savings at all. If you find it challenging to save money, these numbers show that you are not alone. However, having a savings is crucial for protecting you and your family should an emergency expense arise. Thankfully, there are banks and apps that can help automate your savings. Most of these programs track your spending
3. Create a budget that your whole family approves of!
Although most people dread the word, a budget is intended to help you have more fun while using your income wisely. Rather than depriving you and your family of exciting life experiences, a budget can ensure that you have enough money for things such as family birthday parties, vacations, movies, toys, and dining out. Sit down as a family and decide what shared priorities you all have. From there, you and your partner can come up with a budget that reflects those priorities. Getting the kids involved with your family’s finances makes them feel a sense of responsibility and can help them with their own finances later on in life.
Getting your family’s finances in top shape doesn’t have to be boring and stressful. Boosting your credit, creating an automated savings account, and budgeting for things that the whole family wants can give you more freedom and fun experiences.