The average American family has $10,400 of debt, according to a MassMutual study. However, these individuals don’t want to discuss their financial woes. A new study has revealed that U.S citizens believe talking about debt is one of the biggest social taboos. Yet, it has been proven that talking about money can make your family’s finances stronger. Therefore, it’s time to take the plunge, sit down with your family and discuss your bank balance.
Where has your Debt Come from?
The first thing to discuss is the source of your family’s debt. Student loans are a leading cause of debt across the nation, with 44 million U.S citizens owning $1.5 trillion. Meanwhile, 53% of millennials owe their parents cash as they borrow funds to cover the cost of items such as gas, groceries, and rent. Once you discuss and determine the reason for your household’s debts, it’s time to take action to overhaul your family’s finances and get them back on track. The first step you should look into is debt consolidation. This is where all your debts are consolidated into one debt, meaning you have just monthly repayment to make and one interest rate.
Get the Kids Involved
69% of parents are reluctant to talk about money with their children. However, it’s essential that you involve your kids in discussions regarding your family’s finances as it will help to get them on side. Sit down and explain to them that items such as food, gas, toys, and books cost a lot of money and that as a family you’re going to actively cut your spending by walking more and buying less in order to benefit the family’s financial situation as a whole.
Set Financial Goals
With the average household owing more than $10,000 it’s unlikely that you’ll be able to pay it all off in just a few weeks. To ensure you stay motivated and on track set quarterly goals to reduce your household’s debt by a set amount every three months. It’s important that these goals are realistic and agreed by the whole family. So, you’ll need to sit down and discuss ways to reach this goal together. Even simple things such as stashing your spare change in a communal jar and putting it towards your debt at the end of each quarter will make all the difference if everyone gets on board.
Talking about money is an essential task which all families should actively do. You should start by addressing the sources of your debt and finding a way to make repayments easier. Meanwhile, by getting your kids involved and setting financial goals for the whole family to meet, you’ll all feel happier about discussing money and your household budget will benefit too.