Things are pretty new to you these days. You have a new spouse and are starting a new family. From where you sit, things are pretty shiny, almost like the slate has been cleaned. Yet, underneath it all, there are some old issues to settle – the financial mistakes you and your spouse made in the past. It could have been done separately or when you just started out, but those items still linger just out of view. In the end, they put a tarnish on the newness of your lives. Luckily, there are simple things to do to correct these monetary errors in order to brighten your family‘s future. Here are a few examples.
Past Mistake: We never maintained a budget
The Fix: This is one of the simplest corrections to make. Pick up a program like Quicken or Mint, create your budgeting categories, and start populating them from the money you earn on a regular basis. There are plenty of strategies to work off of at our sister site Simple Budget.
Past Mistake: I don’t have an emergency fund
The Fix: Start one. Open up a separate bank account used solely for emergency funds. Populate it with any extra money, like cash left over from regular pay, bonuses, and money from extra jobs. At the minimum you need to have three to six months of household expenses in this account before you can stop. The one caveat – make sure you continue to pay off your outstanding debt while creating this account.
Past Mistake: I/we accrued too much credit card debt.
The Fix: There’s no quick solution to this problem, unless a sudden windfall comes your way. The best thing to do is organize a list of what you owe and to whom. Pull all your credit card statements and list the outstanding debt from smallest to largest. Start paying as much as you can toward the smallest balance until it’s entirely paid off. Apply the money you once used to pay off the first card into the next one on your list. The accumulated minimum payments of all your other cards should quickly pay off the last one.
Past Mistake: I/we purchased a vehicle too expensive for our budget.
The Fix: There are two options here. First is to put the amount due on the car into your list of debts to pay off and utilize extra money from other cleared expenses to zero out the balance. However, if the burden of payments is too great for you to maintain, consider selling the car and using its funds to pay back the loan company. Use the leftovers of that transaction, along with extra cash, to purchase a more affordable vehicle without credit. It may not be as extravagant as the car you once owned, but you’ll feel better owning it outright.