Families, large or small, are built on trust and love. But human emotions are not enough to guarantee absolute security. Only by financially securing a family unit, can it be expected to be strong on all fronts.
If you are wondering about what exactly you can do to make your family financially strong, this is just the blog for you.
There are all kinds of literacy – the most common kind is the one we eventually acquire in school as we grow up. But academic literacy is not the only kind; two other basic types of literacy include emotional intelligence and financial literacy.
These two forms of literacy are also the foundational pillars that can support a family unit.
Here are a few fundamental ways of learning financial literacy and, thereby, building a strong family unit.
The art of saving
The art of saving is an important addition to the art of living. By saving money one makes sure that they will have resources to fall back upon in the future if needed.
Saving is not just to be able to provide for yourself and your family during a dire situation but also to have a surplus of wealth that instills a sense of control & confidence.
While saving, you are advised to separate your private savings from your family savings. In other words, you will be required to make separate lists of financial goals for yourself and your family.
This might sound like an arduous task but in the future, you will thank yourself for being organized and creating more pockets for wealth accumulation.
Investment goals as a family
Investing is considered a superior way of securing your future as compared to saving. This is a popular opinion for all the right reasons.
First of all, saving will help you preserve a part of your wealth but it will not help you generate more of it. This is where investments come in.
It is important that individuals have their own goals as well as investment goals that they share with their families.
A family unit can have financial goals for medical purposes, housing, emergencies, and so on. Invest as soon as possible so that you can enjoy maximum returns.
Regulating expenditure
The whole story of gaining financial literacy begins with the regulation of funds at one’s disposal. Within a family, you might have individual expenses and collective expenses simultaneously.
Thus, it is all the more important to calculate such costs so that you can remain prepared for every expense that comes your way.
The trick is to go about it systematically so that everything is accounted for. Begin by listing down your monthly expenses as a family.
Calculate the aggregate cost and measure it up against your family income. You must be cautious about leaving aside money for investments and savings.
Organizing family goals
Starting your own family can sometimes be tricky because you are expected to share a huge part of your existence with one or more beings. In such a situation, it is not just space that you are expected to share but also resources and financial goals.
While family members will be there for each other at every step of each other’s lives, it is still healthy to separate your personal goals from your family goals when it comes to money.
In fact, in a marriage where your family comprises just your spouse, try not to mix your collective funds with private funds.
FAQs
Why is financial literacy important for everyone?
Financial literacy is an essential part of growing up. It helps you manage your money, budget all your expenses, avoid accumulating debt, reach financial goals like educating your kids, buying a house, retirement plan.
How relevant is financial literacy to every member of the family?
Financial literacy is important for every member of the family because it teaches you the value of money. It helps you explain to your children the importance of saving, spending, and investing.
Understanding the need for a budget, and explaining the value of earning and investing can help you and your family avoid debt, gain financial security and achieve big financial dreams faster.
Why is financial literacy important for children?
Teaching financial literacy to your children is important task for parents. From teaching them basics like budgeting to explaining concepts like investments, all these concepts can help them grow into sustainable and responsible individuals who understand the value of money.
Conclusion
Building a financially strong family unit is not only about inculcating the above-mentioned habits but also teaching financial literacy to your young ones.
You can be their financial role model and teach them to be disciplined from an early age. And to secure their future and their future education, EduFund is your partner to make their dreams come true.
