Financial planning as a parent can be stressful, to say the least, but it’s obviously an important part of securing your family’s future. Starting now with a good plan will not only ensure that your loved ones are well taken care of, it will help give you peace of mind. No one can predict what will happen in the next five or 10 years, but having a little padding and a good idea of your resources will certainly help when life takes an unexpected turn.
It’s a good idea to sit down with your spouse or partner and figure out what your worth is. Your home’s value and other assets should be calculated so that you’ll have a good place to start your planning. It’s also advisable to set a budget and think of the best ways to maintain it; share it with your family members so that everyone will be on the same page. Make a list of all the big things you’ll need to pay for, such as college tuition or updates to your home, and start planning for their execution.
Keep reading for some of the best tips on how to secure your family’s financial future.
Figure Out Your Worth
The first thing you’ll need to do when it comes to financial planning is to figure out how much you’re worth. Take a look at all your assets and debts and have your home assessed so you’ll know the true value. This might be a job for a financial planner if you feel lost, but you can start by getting an idea what your home’s value is.
Is One Salary Enough?
Many parents eventually decide that one person should stay home with the children, especially if there’s a new baby on the way. Look at your income versus your expenses and get an idea of whether you can survive — and thrive — on just one salary. If not, staying home may still be an option; many people these days are turning to working remotely, starting their own home business, or working in the sharing economy.
Even if you have a good plan for the future, sometimes life throws a curveball that can be difficult to recover from. Home maintenance expenses, car expenses, and unexpected health issues can all dwindle your checking account, so you’ll want to have a healthy savings account that will give you some padding. You might also think about setting up a college account for your children; if you decide not to create a basic savings account for them, a 529 plan might be the way to go. However, these plans do come with a lot to think about.
Create a Will and Do Some End-of-Life Planning
No one wants to think about leaving their family members behind, but in the event of your death, you want to ensure that your loved ones will be well taken care of. If you don’t already have a life insurance policy, consider setting one up, and create a will with the aid of a lawyer. Think about what kind of plans you want to make for your final wishes and share these with your spouse or close family members so that everyone is on the same page.
Financial planning can be tricky, and for millions of Americans, it’s a stressful process that can drag on. Creating a good plan doesn’t have to be stressful, however; talk to a professionalwho can help with the details and make a list of your goals. When you complete one, cross it off the list in order to stay motivated.