Family finances are something that is very sensitive and personal for each individual in his or her family. Despite how personal and sensitive dealing with your finances can be, there are a number of things that can make it a lot easier. It is important that you set up the right accounts for your family’s financial success as well as the success of your children and ensuring their future too. Here are 5 of the types of accounts you should plan to open at your local community bank in Milwaukee to help you shape your family’s financial future. |
Family Emergency Fund
You should plan to save 20% of your earnings into this account every month until you have enough to live on for 6 to 12 months. An entire year is the goal so if you get to 6 months’ worth of expenses and are still able to continue to save, then work on getting 12 months of income. If at first all you can do is reserve 10% into your emergency savings account each month, then work on that until you are in a place where you can save 20% or more.
The best way to ensure that you are saving enough is to have this amount come out of your paycheck automatically each paycheck or once per month. You will be able to see the funds build up over time when you don’t actually see it hit the account and then go in yourself and move it.
Regular Family Savings Account
A regular family savings account is the one where you hold onto money that you can dip into and use when you need to. For this and your family emergency fund, you should have funds taken out of your paycheck automatically for an “out of sight out of mind” process that will build your savings accounts without you even having to think about it. A family savings account can be used for major home repairs, vacations, new cars, and whatever else you need it for. Ideally you should have 3 months’ worth of expenses in case you have to live on it short term.
Family Checking Account
Every family needs to have a family checking account where all the income goes into before being transferred and allocated to the other accounts. This is where the majority of your expenses are going to come from, such as monthly bills, home and vehicle maintenance, gasoline, groceries, and other monthly costs. To avoid late fees, set up automatic payments on your monthly bills to come from this account whenever this option is available.
Health Savings Account (HSA)
A Health Savings Account (HSA) is an account that should be used to pay for any medical expenses such as copays, prescriptions, and medical bills. Set aside money each month to pay for these costs and you will find that you have more money available in your regular checking account to pay for you’re more regular and predictable expenses. Setting up an HSA the right way allows you to get a debit card for this account and set it up to be tax deductible so that these funds are not eating at your monthly budget.
Savings and Checking Accounts for Your Kids
Finally, make sure that you have savings and checking accounts set up for your kids. Set aside as much as you can afford for these accounts to pay for your children’s college funds, to pay for travel or volunteer opportunities later on, or a wedding. Once your kids are making their own money, encourage them to continue to contribute half of their income to their own accounts. Teaching personal and family finances starts from a young age. Working through a community bank in Milwaukee can help you teach your kids and the whole family how to manage and save money appropriately.
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