It’s a common story, a family that works hard and budgets will still get into debt problems. Why is this? Well, it’s often a number of factors that come together causing a financial crisis. Luckily, it can be weathered if you prepare financially before having kids and follow the family finance secrets below.
Watch out for student loans
For many people, one of the largest debts they have to pay off every month the student loan. This applies particularly to married couples and families because the repayments are calculated on the household income and not the individual wage of the person that is earning them. That means if one of you makes less, or is staying at home with the kids you will still be expected to keep up with your loan repayments, and if you don’t you run the risk of being in default.
To find out how this applies to your situation look up info on student loans and marriage, and how one affects the other. As well as consulting services that can negotiate a more favorable repayment situation. Something that can take off some of the pressure on your family finance situation, and may just be enough to keep you afloat during the tough times.
Family finance: Bankruptcy isn’t always the answer
For many families, it seems like bankruptcy is the only answer when they have overwhelming debt. Being bankrupt is when you declare that you have no more capital to pay off what you owe. Your debtors are legally entitled to seize your assets in lieu of payment.
However, going bankrupt is a serious thing, and it can affect your credit rating, getting a job, and even have a heavy emotional impact on the family. Especially if they have to move from their home and lose items that they are used to having. That is why it’s always best to consider the other options before going down this route.
For example, a debt consolidation agency can help you manage what you owe better, without having to declare yourself bankrupt. The idea is that they take on all of your debts, and then you pay then one monthly fee. It can be easier this way because they will assess how much you can actually afford to pay each month, rather than your fending off multiple demands that you can’t fulfill.
So, bankruptcy may seem like the only option to help you get through financial problems, but it’s best to hold off on this unless it’s 100% necessary.
Are second jobs good in an emergency?
Consider too the option of getting a second job when times are tough. To do this, you can take on overtime in your current position or earn some extra bucks by answering surveys, or website testing online.
Yes, it can be tough to fit in even more work, especially when you have loved ones to look after. Although, remember it’s not forever, just until the family finance crisis has passed. Also, by working online, you can remain in the family home. You won’t have to spend too much time away from the kids and can still earn enough to get through that financial crisis.