5 Simple Steps to Help Parents Get Started With Financial Planning
Knowing how to get started with financial planning as a parent can be stressful. But it doesn’t have to be that way. Whether you’re a new parent or preparing to be an empty nester, there are some simple steps you can take to get started with financial planning for your family. Here’s where you should begin.
Build a Comfortable Budget
A budget is key to financial planning for parents. You should sit down and really put some thought into assessing your family budget. Start with your income and assets and figure out how much you earn on a monthly basis. Then account for any necessary expenses, such as utilities and healthcare. This will give you an idea of how much you should have leftover for spending or saving every month. You can update your budget as your needs change and grow. Wondering how much you should be saving? Keep reading to find out.
Start Saving Now
Whether you’re getting ready for a new baby or sending your kids off to college, if you haven’t started saving, now’s the time to start. Don’t consolidate your financial planning to a single savings account either. It’s wise to begin savings plans for all the short-term and long-term goals you have for your family. You can start saving for childcare expenses, college, or a down payment on a new home. Think it’s too early to begin thinking about retirement? If you want to enjoy your life later on down the road, you should start making plans that will help keep your comfortable and taken care of when the kids are grown.
Know the True Value of Life Insurance
As a parent, life insurance can make sure your kids and family are financially taken care of should the unthinkable happen. Funeral expenses can run upwards of $7,000- $10,000 and life insurance will help keep this burden off of your family. But life insurance can be useful in other ways as well. If you find yourself needing or wanting a little extra cash in retirement, you can sell your life insurance policy to cover any expenses. A life settlement is especially helpful if you need long-term care or if you simply need extra cash for daily expenses. Do your homework when searching for policies and make sure you fully understand the different options available and the cash values and premiums involved.
Give Back to Your Community
Want to help people in your community and instill some positivity in your children? Then consider making charitable giving a part of your family’s financial plan. Philanthropy can help families bond and is a good way to teach children empathy for those in need. Have a family meeting and talk about the charities you would like to support. Maybe your son loves dogs and wants to give to local shelters or you have a passion for the arts and would like to support youth art initiatives. You can give each family member a “charitable allowance” to give to the cause they feel passionate about or decide on one charity as a family.
Discuss Finances With Kids
As you put together your financial plan, consider taking the opportunity to talk to your children about their finances. Kids learn their financial habits from their parents, so it’s never too early to begin helping children learn about financial responsibility. You can help them put together a budget for their allowance and use games to help them understand their financial choices. If your children are older or getting ready to start college, talk to them about credit and how to use financial options wisely to keep themselves stable in the future.
Financial planning may not be fun but it’s necessary for parents looking to provide stability for their families. Whether you’re getting ready for retirement or buying your family’s first home, keeping your finances in order will help you feel less stressed and more in control of your family’s future. So get started today!
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