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The Honolulu Advertiser
Posted on: Wednesday, April 21, 2004

Cut debt, stash cash to prosper as family

Gannett News Service

Sam Goller, author of "Yes, You Can ... Afford to Raise A Family" (Michael O'Meara Books, $19.95) offers these tips for developing healthy financial habits:

• Begin saving for college now. The latest studies estimate that in 18 years, the cost of one year's tuition at a state college could be as high as $33,000.

• Map out a work strategy. Decide now if both parents will continue working full time after baby arrives. If it is financially possible for one parent to stay at home, begin living on only one paycheck during the pregnancy to get used to the reduction in income.

• Start an emergency savings fund. Set aside three to six months of living expenses for unforeseeable setbacks, medical emergencies and car breakdowns.

• Eliminate credit card debt. The average credit card debt per household in 2003 was $9,205 with 13.5 cards per family. Research shows people using credit cards spend up to 30 percent more than they would if they had spent cash.

• Choose locations wisely. Avoid spending time in places where the temptation to spend is high. Spend time in a library or park instead of the mall to avoid impulse purchases.

• Find hometown fun. Find out when restaurants have "kids eat free" nights, check the paper for free community events and contact the library and museums about free family activities.