Unimor Capital Corporation

Tag: kids and money

  • Start an Emergency Fund

    Start an Emergency Fund

    We never know what the future holds for us, so it’s always best to be prepared.  Having an emergency fund is extremely important so you’re always prepared to deal with what life brings—good or bad.  It’s a good idea to make an emergency fund one of your highest savings priorities.  Put $20 a week in an emergency fund and your account will grow to over $1,000 in just one year.  That’s often enough to cover a repair bill or emergency travel.  An emergency fund can also shield you from the high cost of borrowing and keep you from sinking into debt.  Follow these five tips to help you set goals and take steps toward starting an emergency fund:

    Chart your monthly income & expenses. Grab a piece of paper and write down how much money your earn and how much you spend for each month. Be sure to include recurring expenses such as your rent or mortgage, utility bills, childcare, and estimates of other out-of-pocket expenses for things you might buy such as movie tickets, dinner out and clothing.

    Set your emergency savings goal. An emergency fund should cover three to six months’ worth of realistic living expenses. If you feel your income is stable or have access to home equity or other forms of credit to use if needed, then you may be able to plan for the lower figure.  If your credit is near its limit and your income outlook is less secure, you might want to save more.

    Develop a plan to start saving. Setting a goal and developing a plan to achieve those goals go hand-in-hand. Part of your plan may include specific and measurable targets to work toward.  For example, one specific goal may be to save an extra $300 over the next six months to put into an emergency fund.

    Put your emergency fund in an accessible place. The best place for your emergency fund is in a liquid account (accounts where your cash is easily accessible). A liquid account might be a regular savings account at a bank or credit union that provides some return on your deposit and from which your funds can be withdrawn at any time without penalty.  If you consider other options, like a certificate of deposit, money market fund or mutual fund, be sure to figure out how accessible your money will be in an emergency.

    Stick to your plan. Once you’ve created your plan, make sure you stick to it. This can sometimes be the hardest part of saving for an emergency fund or any financial goal in general.  If your goals are realistic and attainable, sticking to the plan will be much easier.  A good way to stay on track is to save automatically.  Set up a systematic transfer from your regular checking or savings account at your bank.  Be sure to keep your rainy-day funds separate from your other accounts, and label it “for emergency use only.”  Just writing down an account’s purpose can keep you from spending the money for any other reason.

    Starting an emergency fund is a necessary building block for long term financial stability.  Anyone can do it; you just need the right plan.

     

  • How to Talk to Your Kids About Money

    How to Talk to Your Kids About Money

    In some families, how to talk to your kids about money can be more uncomfortable than talking about sex. Many parents don’t know how to approach the topic of money, and some avoid it altogether. By starting the discussion early, you can make it easier to talk about this tough topic later, when your child is making larger purchases, thinking about getting a job, or beginning financial planning for college.

    Practice Smart Spending
    Talk with your children about how you make spending choices based on more than just affordability. Use language like “We’re not going to spend our money that way because…” or “It’s not a good value because…,” rather than just saying, “It’s too expensive,” which may give the impression that you would buy it if you could afford it.

    Create Learning Opportunities
    If you’re refinancing your mortgage, you have an opportunity to discuss the concept of interest and the importance of paying off loan balances quickly. When you’re taking out a car loan, talk about how loans allow you to pay for things that you don’t have the money for, but you end up paying more in the long run. Bring your kids with you to the bank. If you’re making a deposit in a savings account, talk about the importance of ‘saving for a rainy day’.

    Honesty as the Best Policy
    If you are facing financial difficulty, be honest with your children. You don’t need to worry them with all the details, but it is helpful for them to learn that money isn’t magical—it doesn’t just appear when you need it.

    Stress Wants vs. Needs
    Many kids—especially young ones—have difficulty differentiating between wants and needs. When your child says she ‘needs’ something, ask if she really needs it, or if she just wants it. Make sure your child understands the difference, and start paying attention to what you’re saying and the example you’re setting—for example, do you really need an expensive cup of coffee to get you through the morning?

    Keep an Open Dialogue
    When you’re out shopping, talk with your kids about why you make the purchases you do. Are you influenced by advertising? Pricing? The quality of the product? How do you choose one product over another? Help your child start thinking carefully about making purchases.

    Be an Example
    Discuss with your children the choices you make with your money. For example, how does your caring for others impact how you save, spend, and give money away? Why do you sometimes wait to make certain purchases? What does it mean to you to be responsible with your money?

    Highlight the Positive
    Many financially savvy practices, such as buying secondhand, donating old clothes to a thrift store, and reusing and recycling goods, are also good for the environment. Point out that not only are you saving money by doing these things, but you’re also taking action to help preserve the environment.