When you make financial plans as a single person, you often don’t have anyone to answer to but yourself. You can dictate exactly how your money gets spent, how much you save and what your goals are. As your household grows, creating a cohesive financial plan can become more complicated—and more vital. Successful family financial planning can ensure your family’s stability and protect its financial future.
How To Budget And Save For Major Family Milestones:
Track your spending
Brittany Bramlett, an accredited financial counselor, says tracking your spending is the first step to creating a budget.
“A lot of us think that we know what we're spending, but writing it down or typing it out forces you to face the numbers,” she says.
Once you’ve done that, it will be much easier to create a budget and identify areas where you might be overspending.
Plan for now and later
When you have a family, you’ll likely have a lot of short- and long-term expenses to plan for, such as school supplies, vacations, health care, college, retirement and beyond.
A high-yield savings account can be a good vehicle for shorter-term savings or an emergency fund because it’s liquid but earns a higher interest rate compared to traditional savings or checking accounts. For long-term saving, you might consider putting your money in investments so it can grow over time.
If your employer offers a 401(k) or other tax-advantaged retirement account, be sure you’re putting money in it, especially if your company offers a match on the contributions…
How To Invest For Long-Term Growth and Education:
Parents have several options when it comes to investing in their children’s futures, including 529 plans. These are tax-advantaged savings accounts that let parents and other adults save for a child’s education. They come with many benefits, including the ability to invest and grow your savings without incurring taxes on the earnings as long as the money is used for allowed education expenses…
How To Protect Your Family's Financial Future:
Expect the unexpected
To protect your family’s financial future, it’s important to have an emergency fund. Without one, sudden, unexpected costs can derail your financial plan and put you into debt. Many experts recommend keeping at least three to six months’ worth of expenses in your emergency fund. Bramlett also recommends evaluating your current insurance coverage and determining whether your coverage is sufficient for your needs.
Plan for after you’re gone
Financial Advisor Michelle Taylor says it’s important to have a plan for the worst-case scenarios to ensure your family’s financial security, even if one or both parents die. “This is not the fun part of wealth-growing,” she says, but parents should ensure they have sufficient life insurance coverage and establish an estate plan.
To learn how to set shared family financial goals, read the full article here.
The sooner you can start planning for your family’s financial future, the more prepared you’ll be to weather the ups and downs of life.