About to start a family or looking forward to? Begin this chapter by knowing what to do and doing what you can now with your finances. Let Mission Family Financial Planning for Your Family launch today!
Nick Wilson, loan specialist and CEO of AdvanceSOS, shares his expert opinion on how you can plan for your family’s finances. He lends his perspective as someone who sees customer cases every day. Nick shares the basics of family financial planning and how to make a simple yet great one. Keep reading to learn more.
What Is a Family Financial Planning?
Family financial planning is at it describes – planning for your family’s or soon-to-be family’s finances. A financial plan is a long-term comprehensive plan on staying financially stable. The essential parts of family financial planning include,
- Budget planning – making ends meet given your income
- Debt management – managing current and future loans and credit lines
- Savings and investment – setting aside money for milestone projects (college education, housing, family trips, retirement, etc.)
Importance of Family Financial Planning
Making family financial planning a priority avails you and your family security.Having control of your income, not overspending, and investing right are keys to a free life. Avoid issues like overwhelming bills or not having enough to send your kids to school. Protect yourself against crises by having enough money to cushion yourself from emergencies. And have the luxury to seize opportunities like going on a trip if there’s an airline promo.
How to Make a Family Financial Plan?
#1 Set Your Personal Financial Goals.
Different people have different goals, but they are all important to note. You know your needs and wants more than anyone. If you have a partner, ask them about his needs and wants. Use the answers to set up goals for your: (1) short-term; (2) medium-term; and (long-term) financial future.
#2 Track Your Cash Flow (In and Out).
Where does every penny of your income go nowadays? Do most of it pay for essentials or luxury items? Track your income and expenses. Gain insight on what things to avoid to save money or areas to improve on.
#3 Create a Personalized Budget.
Your budgeting style now will change once you have a family. You will be responsible for people other than yourself. So, keep that in mind when you survey how much things may cost your family soon.
#4 Have a Plan for All Common Emergencies.
Not everything will go as planned – this is a fact. Have a financial plan for minor accidents, hospitalization, and calamities. An emergency fund is a great way to remedy this worry.
#5 Curb High-Interest Debt.
Debt is not always bad, but high-interest ones are rarely good. Debt problems can balloon and burst your stability. If you can, settle such loans ASAP and skip the trouble.
#6 Plan for Your Retirement.
Your retirement will come, and it will be uncertain. Secure your family’s future with financial protection like insurance.
#7 Invest to Progress.
Suitable investments make you go far in life. Have financial freedom by striving to have passive income that you can lean on when you need it.
Commonly Asked Questions
When Is the Best Time to Start Planning Your Family’s Finances?
Today is the best time to start preparing for a family – especially your finances.The more time you plan, the more you can prepare. Taking baby steps towards planning can hurt no one if you know you want a family someday.
Think about one thing first – a house, perhaps. Where do you want to settle? How big do you like it? Think of things now and then, so you can see your future a little clearer. Soon, you will have more concrete goals to act on when you’re ready.
What Are Ways to Make Family Financial Planning Easy to Do?
Handy software can ease the difficulty of financial planning. Digitize your plans, access them anywhere, or share them with your partner. Maximize your efforts as well with the analysis tools of your chosen software. Begin by searching “personal finance software” online.
Contributor | Amanda Girard
Amanda Girard is AdvanceSOS’ top financial copywriter. Amanda has been planning and writing the best content for its official website with the team. We are proud to have her on board, making sure we publish verified, educational, and exciting pieces for you to enjoy.