Plan Ahead. Get Ahead. > Life Events > Starting a Family
How Smart Young Parents Keep Their Savings on Track
Can you really keep your savings plans on track after you've had a baby? Yes, say expert savers. By resisting the temptation to spend more than you earn, you can successfully meet your financial goals regardless of your life stage.
Here are some key strategies that smart young savers use to keep their savings accounts healthy:
- Pay off your credit cards each month. Avoid carrying a balance. Even if your card has a low interest rate, you are at risk as long as you are paying off the balance in installments. That's because most credit card companies have the right to raise your interest rate if you miss a payment by as little as one day. When you're concentrating on taking care of your new baby, the last thing you want to worry about is a big jump in your credit card payments.
- Tune out temptation. To keep shopping temptations under control, set a dollar limit for yourself — say $500 — and resolve to take a "cooling off" period before you spend more than that amount. Put a picture of the item you want in an envelope, seal it and save it for one month. Chances are, when you open that envelope in a month, you'll find that the urge to buy will have passed. If not, stuff a few dollars into the envelope each week until you have enough to buy it.
- Shop wisely. After your baby makes three, your financial choices become more important than ever. To get costs under control, track everything you spend during the course of one month. Then, for each category of expenses — entertainment, food, transportation and so on — set a goal of spending 10 percent less than you did during the month you were keeping track. Invest the difference.
Take the next step...
Get ready for college. It's never too early to start saving for your child's education. The Principal Financial Group offers several options to assist you.
