“A simple fact that is hard to learn is that the time to save money is when you have some.”

If one of your New Year’s resolutions was to spend more time with your family, do double duty and spend time teaching them to become money wise.

Learning to become money wise not only eases economic hardships; it also contributes to a happy home.

According to a national report released by the Bridging the Gaps organization, about one in five working American families, 41 million people, cannot afford basic needs.

The report also noted how many workers “are in jobs that do not provide health insurance or enough earnings to cover basic expenditures” but earn too much to qualify for government assistance programs such as Medicaid and food stamps.

“We no longer live in a world where having a job means you’re automatically able to make ends meet,” said Heather Boushey, co-author of the report. “Our work support policies need to be updated to support the millions of families with earners in bad jobs.”

Meanwhile, teaching the entire family to become money wise can put you on the road to financial prosperity.

Experts recommend that every family member learn to save: “No matter how much or how little you make, always save a little bit.”

Know the difference between needs and wants. Live within your means. One father reportedly tried to stress this point by continuously telling his family, “If your outgo exceeds your income, your upkeep will be your downfall.”

Parents are encouraged to establish a “chore debt” to teach their children financial responsibility. This can be done by acting as your child’s credit company and offering an advance on his or her weekly allowance. Instead of paying out an allowance at the end of the week for chores done, consider giving them the money up front. If they fail to follow through on chores, charge them interest in the form of giving them additional chores. It may take a few weeks to get your point across, but children will catch on about completing chores and the value of money.

Those old enough to incur credit cards are advised not to pay interest on anything that loses value. Strive to make money, not lose it.

The key to saving while reducing existing debt is to create a budget listing all debts in order of the interest rate. Add up all income and incoming funds, including savings and investment accounts. List any major purchases needed in the next year. This will help you to easily identity any extra funds that should be deposited into your savings account.

Developing a good plan can help you and your family to keep your New Year’s resolution and to become money wise.

After all, “Wealth consists not in having great possessions but in having few wants.”

Tips to help lower debt
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List all your creditors and current debt. Determine which expenses need to paid off first and their interest rates. Each month, write down the payment made and the remaining balance.
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Create a household budget of only necessary expenses. Eliminate luxury items such as travel, purchase of new electronic gagets and games.
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Cut expenses. Find ways to cut down on DTE and other utility bills by possibly turning down the thermostat, turning off lights when not in use, using coupons when going grocery shopping and avoiding buying impulse items such as candy and potato chips.
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Limit credit card usage. Carry just one major credit card and restrict its usage to only emergencies.
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Stay motivated by creating easy “wins” for yourself. Paying off smaller balances first can serve as an encouragement, as it will decrease the number of creditors you owe and the number of checks you have to write next month.