For parents, financial planning can seem like a stressful task. But planning for your family’s financial success doesn’t have to be difficult. You can follow a few easy steps to set your family up for financial stability and happiness. Here’s where to start.
Create Some Financial Goals
Before you get started with your financial planning, it helps to have some goals. Your goals can be short-term, long-term, or, ideally, a little bit of both. If you’re a new parent, or getting ready for your first child, come up with some goals that will cover the expenses of a baby. Think about short-term family goals, like taking a family trip or saving up for a down payment on a house. Also, take your family’s future into consideration. You may want to think about college for your children or planning for retirement. Write down your goals and then follow the next steps to make them happen.
Build a Family Budget
A solid budget is your best bet for achieving financial goals. Having a family budget will relieve some of the financial pressure you feel as a parent. Plus, staying on top of your finances is a great way to improve your physical and emotional health. It may even lead to more happiness. So sit down and really take measure of your income and assets. Figure out what your family’s monthly expenses are and then how much you should have left over each month. If possible, include a little wiggle room in your budget for fun, like a night at the movies or dinner at your favorite restaurant. Consider using a budget or banking app to keep track of your budget and your progress toward financial goals.
Include Room for Savings
Savings are essential when you’re a parent. From saving for initial expenses of a new baby to making sure your kids have enough money for college, you should begin saving as soon as possible. Look for a high interest savings account to help you reach your goals faster, but also look into other savings option that may yield higher returns. As you put together your savings plan, be sure to include saving for your retirement as well. The sooner you begin putting funds aside for retirement, the more options you’ll have to enjoy these golden years when you get older. So, start saving for your own future as soon as you can, to make life a little easier down the road.
Make Smart Investments
The stock market can be a little scary, especially when you have children who depend on you. But investing doesn’t have to be as frightening as it seems. In fact, investments are a great way to grow your nest egg for college, retirement or any other financial goals. If you’re still a little wary, and are looking to invest quite a bit, speak with a broker about the best options for your money. If you’re not quite ready to work with a broker, or just feel like dabbling in stocks, there are plenty of apps that make investing easy. Try one out to see if investments may work for you.
Work Out a Will and Life Insurance
It’s not pleasant to think about what your kids would do when you’re no longer around. But as a parent of any age, planning for your end of life can create peace of mind for you and stability for your children. Look into getting life insurance that will take care of any final expenses and leave enough leftover to keep your family comfortable. Also make sure you have a will written out and updated from time to time. Create a solid plan for your estate so that your family will feel less stressed if the unthinkable should happen, and consult an attorney if needed.
Financial planning as a parent doesn’t have to be overly complicated. With a few simple steps, you can set up a plan that will ensure your family is taken care of now and in the future. So don’t delay and begin your financial plan now.
– Sara Bailey