Financial Planning For Young Families – If you are a young family or are planning to start a family soon, you need to consider budgeting. A budget is not only important for you and your partner to stay on top of your finances. But it’s also important for the little ones you have or plan to have.
If you don’t have a budget yet, you should consider making one sooner rather than later. If you have children now, you know how expensive they are. If you don’t have any yet, you’ll learn quickly. Why not start early to avoid financial worries later down the road.
Financial Planning For Young Families
First of all, having children is very expensive. If you haven’t started a family yet, you may not know how much money will be spent on taking care of your little bundle of joy. Planning ahead is key to dealing with rising costs.
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Your family may also lose a percentage of their income. This could be due to one parent leaving work to stay home and take care of the children. Even if both parents decide to continue working, you still have to pay for very expensive childcare. Then you need to keep in mind that you need to take more time off from work to take your children to medical appointments and you need to stay home from work when they are sick.
We all want the best for our children and it is expensive to give them a good education to prepare them to go out into the world on their own. The sooner you start saving for your child’s education, the better off you will be financially and the better off your children will be.
Raising children is a big responsibility and your child depends on you for everything. Even when they get older and you don’t have to feed them and change them, they still need financial security. And if something happened to you and you couldn’t work or worse, you didn’t exist anymore.
Now that you know how important it is to budget to ensure that your family is protected; Here are some things you need to put in place now.
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The first thing you need to do is create a budget that includes everything you need on a monthly basis. A budget is the only way to really control where your money goes instead of letting the money control you. The key to creating a budget is to include everything needed.
Another thing you need to consider is giving yourself some wiggle room in your budget. When you have children, unexpected expenses will come up all the time. By giving yourself some room in your budget to take care of these expenses, you are more likely to stick to your budget.
Having an emergency fund is a must in any financial plan. Things always happen, if you have an emergency fund you are covered when something happens. This will help you cover these costs so you can stay within your budget.
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An emergency fund will also keep you out of debt. Aim to build an emergency savings account for at least 3 – 6 months of your monthly expenses. Of course, the more you save the better.
Helpful tip: Keep your emergency savings in a high-yield online bank like CIT Bank so your money grows faster. Who doesn’t love free money!!!
Your entire family needs to have health insurance to cover medical expenses. When you have children, there will be many in your future, children will always be sick. You will likely have many visits to the emergency room, so it is best to be prepared.
In addition to getting sick, your kids have regular doctor appointments, vaccinations, school and physicals and the list goes on, it’s better to prepare now before it’s too late.
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You also need to get disability insurance for you and your spouse. Disability insurance will cover large expenses if you are injured and unable to work for a period of time.
Don’t make the mistake of not having an emergency fund just because you have disability insurance. This insurance will pay for most expenses but not all and it may take a while before you get money for emergency savings is always necessary.
A will and life insurance are also a must. You need to make sure your family is taken care of if something happens to you. Don’t leave your family’s well-being in the hands of fate. Both you and your partner need to have this in place.
Make sure you are very clear about who you want to care for your child in your will. Also, be specific about how the life insurance money will be spent to take care of your children. Of course they need to meet their basic needs. Furthermore, what happens to any money left after the children grow up?
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Besides making sure your kids are ready for the future, you also need to take care of yourself. Make sure you’re contributing to a 401K or IRA so you’ll have it available when you retire.
If your employer matches any money you contribute to your 401K, be sure to take advantage of the free money. This means you should contribute enough to get all the benefits your employer matches.
Finally, will you pay for your children’s higher education or part of it? This is something to think about sooner rather than later. If you have enough money to help your children, the sooner you start the better.
On the other hand, if it’s a struggle just to make ends meet, this would be the first thing to give up on. Yes, it would be nice to help your children in this regard, but not if it means jeopardizing your own financial future. Make sure you save for retirement first.
Young Family With Kid Is Planning Of Home Financial Money Budget. Stock Vector
If you have good credit and a high income, the bank will approve you for a high credit limit. With that comes a large payment and interest. Even if you can afford it, think about everything else you have to take care of. Make sure these are in place. You should also keep your mortgage payment at 30% or less of your gross income.
When using a credit card to make purchases, make sure you can pay off the balance in full each month. Credit cards are convenient and have advantages in using them. But it’s also very easy to overspend without realizing it until the statements come in.
With so much going on in a young family, long-term savings like retirement and higher education may take the top spot. If you put off saving for these things, you may end up not having enough to cover them. The sooner you start saving, the less of a burden it will be on your budget.
There are many things to consider when creating a budget for your family. The sooner you start, the better off everyone will be.
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My friends at All Finance Tax put together this great infographic that is sure to help you create a budget for you and your family!!
Lisa is a self-taught personal finance avid saver and founder of Money Minded Mom. His tips and advice have been published in Opp Loans, The Simple Dollar, Today, AOL and Making Sense of Cents. Read more.
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Financial Planning For Everyday Families: A Step By Step Guide For Young Families And Couples: Amazon.co.uk: Palmer, Rebecca Bradshaw: 9798555293237: Books
The biggest stigma is that when you start throwing around stuff like budgeting, it’s set in stone, there’s no more fun life and it’s just how you have to live. Not true at all! However, it is important to have goals for saving and spending. So start this habit as soon as possible. Millennials (born between 1981 and 1999) are well used to change
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