When you get a family, one of the most important things you need to do is ensure you’re financially stable. The future will bring so many different things your way that will require large amounts of money. For instance, you might need to afford a bigger home, start saving for your kids’ college and set some money aside for retirement and unforeseen events that have the ability to destroy even your best-laid plans. But, how do you exactly start planning for your family’s financial future? Here’s a guide that might make things at least a little clearer.
Understand your current situation
You can’t move forward before you understand your current position. In order to understand your family’s spending and finances, you will need to gather bank statements (or use online banking) in order to analyze and track your expenses. And be thorough—everything from utility bills to toys and eating out counts. A plain old spreadsheet or a handy budgeting app will get the job done here without any issues.
Protect yourself first
All parents think that they need to put your kids first in everything, but that’s not exactly true when it comes to finances. If you want to ensure everyone has a stable financial future, make your finances a priority. Reduce all your debts, pay off mortgages and have a good retirement plan in place. If you neglect to do these things, they will fall to your kids, which is something they probably won’t appreciate. Plus, the money you will lose on interest on debts can never be recovered.
Analyze your current financial situation (all your income, assets, debts and expenses) and compare it with the hopes for your financial future. Essentially, see where you are and compare it to where you want to be in the future. Is there an amount you want to have available? Well, set your goals and use different ways to get there. With paying off your debts and setting good goals, your financial future will have a strong foundation and provide minimal worries about incurring interest or fees.
Once your debts are paid, you can start saving. If you want to save money for your kids or grandkids, it’s smart to open a tax-efficient Junior Individual Saving Account and put money in their name. You can also start a practical insurance savings account that will provide you with returns without lock-ins. This insurance saving plan gives you insight into all returns on your savings and instant access to your account. In order to save better, you must also identify the spending habits that hold you back. Analyze your bank statements and see how much you spend on things that you don’t actually need. This is a great way to get a better awareness of your bad spending habits and actually reduce money waste. And now that you have a good goal to work towards, you will find saving much easier than before.
Protect your money and possessions
Protecting your income and possessions is very important if you want to have a care-free and stable future. In case anything unforeseen happens, like illness, injury, death or any other issue that will jeopardize your family’s finances, you need to be ensured. Getting a mortgage or rent protection, income protection, illness cover, and life insurance is a crucial step towards a safe future.
Make a will
It’s super understandable that this is something you don’t want to think about, but if you want to ensure a smooth and stable future for your loved ones, making a will is a crucial step towards it. If you die without a will, your loved ones will find themselves in an even harder position. The money they receive and the rate in which they receive it will depend solely on the third party’s control. So, in order to make things easier for everyone involved and ensure their future is financially safe, draw up a will as soon as possible.
Your family’s financial security can’t be left to chance! You need to plan well, take your time and get everything in order if you want to provide your loved ones with a happy and easy future. And remember to start saving and paying off your debts right now—this will give you peace of mind for years to come. Making first steps today, no matter how small, will ensure your family enjoys a safe and secure financial future.