Many people believe that money, in many ways, is indeed the root of everything evil. Families, for one, are no strangers to many money-related misunderstandings, conflicts, and even expensive and emotional legal battles.
Many of these legal issues force family members in conflict to rush to find skilled family lawyers to represent them in court. There are plenty of instances when unresolved financial issues, no matter how simple, often lead to families eventually breaking up — something that should not happen for whatever reason.
Knowing these dire consequences, family members must work together in resolving whatever problems they have about money. Such consequences are perfectly preventable, but only if the family members are willing to sit down and resolve the issues quickly and fairly.
If you’re having some money-related issues right now, then be sure to take note of these easy ways to handle financial problems in the family:
Learn to be financially literate
Many mistakes and misunderstandings of family members concerning money are due to one sheer deficiency: lack of financial literacy. As such, it’s critical to make conscious efforts to learn as much you possibly could about budgeting, spending, and saving money so you’ll avoid problems related to them.
Professional financial advisors out there would be more than happy to take you in and give you critical tips about effective financial handling. These advisors know the typical problems families face about money, and they also know what needs to be done in each situation.
Overall, it would be an investment that you won’t regret since you can apply the skills and knowledge you’ll gain to many situations involving money.
Work out and implement a financial plan
Going through life without some form of plan is like getting into a full-on battle without weapons or finding a single pin in pitch darkness without anything to illuminate the room. Money-wise, it’s important and non-negotiable to have a financial plan that perfectly captures a family’s unique financial challenges and coping mechanisms.
You can choose to devise a working plan with your financial advisor’s help, or you can craft one on your own to save money. You need to identify your expenses (both current and future), list down your income sources, itemize the things you spend your money on, and list down ways on how you can balance things out so you won’t go bankrupt.
You should treat your plan as a work-in-progress and make necessary tweaks along the way. By having a versatile financial plan, you won’t be caged by the initial approach you laid down, which means you’ll have a better chance of handling your family’s finances and avoiding money pitfalls along the way.
Identify individual and collective needs and wants
Wants are those things you get because they make your life more comfortable or fun, such as membership to the gym or a high-end gaming console. Meanwhile, needs are essential to your everyday life — like food, basic clothing, medicine, and shelter.
If your family members have their own needs and wants, you should talk it out with them and list down your individual wants and needs, and then see which of the wants you’ve identified you could do away with.
This simple yet highly essential exercise would iron out things for everyone since you’ll have a chance to discuss whether the different items that belong to ‘wants’ can be accommodated or not. Once you’ve all identified these things, then you’re ready to proceed to the next step, which is finding some compromise.
Find areas of compromise
Hand-in-hand with identifying your family’s needs and wants is working out some compromise on the items that you’ve listed down as wants.
For example, the youngest kid wants to have monthly trips to the mall, while the eldest wants a weekend camping adventure at least once every month. You can work out a simple compromise with the two kids involved to do things alternately: one month, you’ll have a camping trip to a family-oriented camping ground, and the next month, you’ll be at the mall to watch a movie or shop for some toys.
Whatever items you’re working on, the bottom line is to agree on a family about the compromises you’ll make, so there won’t be any ill feelings from family members about the arrangements.
Live within your means
Another great trick to handle family money issues is to live within your financial means. If you’re earning $20,000 a month, for example, then it’s not practical to spend $19,0000 monthly with very little to save. If buying a brand-new smartphone would mean you won’t get to pay the month’s mortgage, then it’s an expense you should not make.
Bottom line: don’t spend so much and then save money that’s left, but save enough first and spend what’s left.
With these simple tricks, your family’s money problems can be prevented or easily resolved.