There is a rough sea out there today for many American families. Today can be your day to set a course to avoid the rocks and get your family moving in a safer direction.
A lot of people still believe you can’t do a lot with a little. As a result, many millions of Americans are not saving money and paying down debt. Of course, many Americans are saving and many others are pushing their debt down.
Consider that in 1979 the average recommendation for an emergency savings fund was 3 to 6 months of expenses in actual savings. Is the job market even close to what it was in 1979? Of course it isn’t.
Think about this: If you lost your job, could you go out and replace it immediately with the same income? This is the $1 reason that we feel the 2010 – 11 recommendation for emergency savings fund should be 15 to 18 months of expenses in money market savings and certificates of deposit. And the best news is that you can do it.
If you have not seen our “1% Savings Plan,” you must check it out for free in our past blog entries here or at www.BoostMyWealth.wordpress.com or at www.MiddleClassMoney.com. It is an easy way to generate steady savings without killing your lifestyle.
How else can you start your path to boost savings and reduce debt?
First, sit down with your entire family. Tell them that you are going to ask them to all work with you to do what every smart company has been doing this decade and especially since the beginning of the financial crisis: You are going to reduce and eliminate debt and build a cash reserve. Why? Tell your family the reason for the meeting and the reason for doing it is teaching each other what is possible when the family comes together. You can also tell them it is for peace of mind and to establish goals and patterns for your family that will launch everyone at the table on a path to wealth in their lifetime.
Of course, money is not the most important thing, but it gives you important options if things get worse.
Lay out your spending over the last six (6) months. Offer for family members to put things in several categories:
Bills (that must be paid each month)
Spending to feed, shelter and put clothes on the family
Other spending (this can be for non-essential food, shelter, et all)
Be honest about what spending is essential and brainstorm about which expenses could have been avoided. Work together to try to identify areas where you could cut back spending in the future and keep tabs on how much money that is as you go through the process. Keep adding it up and keep that amount of money in one place as you write out the results of your spending over this six (6) month period. You will want to take this money and turn it into “family bill #1” in future months. In order to do this, it must be the first bill you pay each month. Say you have gone to the movies once a month and your family votes that you can stay at home and have “movie night.” Take the money you would have spent – say that is $40 (it is probably more) and make that a future monthly bill that you pay at the first of each month.
Score “family bill #1” to savings = $40 a month.
Perhaps you have this meeting once a week to talk about how to improve saving and reduce debt. Maybe one week you focus on how to save more money by reducing spending. The next week you look at debt reduction.
Start with credit card debt. Take out your credit cards and look at them because credit card companies are often the BIGGEST SINGLE FINANCIAL ENEMY of your family. These are the bad guys. Separate your credit cards and find out exactly how much interest you are being charged by each.
Begin making minimum only payments on each card EXCEPT the one with the highest interest rate. That card should receive as much additional payment BEYOND the minimum as you can stand to make until it GOES AWAY.
When you pay off a card, roll the money (all of it) to pounding the next one).
Once you have paid off the first card, celebrate with the family and rotate to the second card (the one with the highest interest rate). Keep doing this until credit card debt is 0.
Credit card debt is the #1 reason middle class families cannot build wealth today. See them as the enemy they are to your family.
Also make sure you find out if there are yearly fees (fleecing). Call the credit card companies and ask them to eliminate any yearly fee. If they won’t, tell them you will have to take your credit elsewhere. Ask for a supervisor if you can’t get traction with the person on the phone. Be focused, nice and like a stone wall. You may have to make fifteen (15) calls. What do you care if you get these fees off your family?
The next family meeting you have can be focused on reducing monthly billing. Companies do this all the time and you can, too. Get every bill you have out and put it on the kitchen table. Then, set a goal (we recommend 12 – 15%) and call each company that sends a bill to your home and tell them that you are going through a financial crisis and need to reduce your bill with their company by ____%. Again, like you did with the credit card companies, don’t hesitate to speak with a supervisor or make many, many calls. You may not get a 15% reduction, but what if you get a 7% reduction or a 10% reduction? Yeah!
Keep in mind that you want to keep your mind open to suggestions they make in terms of reduction in services or bundling. Just make sure it is a good deal for your family.
Take the MONEY you SAVE (by reduction) and PUSH IT to actual SAVINGS as “family bill #2.” Each month, you will now take the money you saved by reducing your bills and establish it as an actual bill you pay to your family each month. This will BOOST your regular savings – and that is the GOAL that counts. Regular savings is critical and should not be optional in your life (or the lives of your children if you want them to be successful in the 21st Century).
There are many other tricks. You just have to focus on pushing more and more money to savings. It will BLOW UP and pile up faster than you think!
Oh, and you can do it!
YOU CAN CHOOSE
You can choose to take specific and steady actions to change your life, change the lives of your children and change the future of your family tree. Yes, you have the power yourself.
All the corporations, the private equity companies, crooked politicians and rich people can’t stop you if you really have a systematic plan that starts with regular savings and steady investment along with your regular bills.
If you are willing to take the time with your family to make a plan for reducing and then eliminating debt over time, you can gain more control over your finances and you can teach your children how to become wealthy over time.
If you are willing to make people work for the money you spend with them, you can build savings and then wealth.
These things are within your reach. You just have to start and you have to be encouraged.
You can join our free Facebook group (or have your children do it, too) by searching in the Facebook bar on your “wall” for “Live The Lifestyle Your Family Deserves.” Click on “become a fan.” It’s free and it ties our free blogs into that group.
If you want to give your children the same information we are giving ours, you can purchase the only thing we sell on any of our blogs or groups. It’s called “How To Survive Any Financial Crisis” and you can get it for only $4.95 at www.middleclassmoney.com.
Thank you for reading our blog and good luck!