Simple tips that can help solve your most pressing financial concerns when planning your family’s future.
Nobody knows like someone who just got married, lost a job, or had a new baby how fast the money pot can begin to dry up. But what if you don’t have a money pot!!?? You’d be up a creek without a paddle, and Heaven knows we don’t have time for that. No worries, let’s talk about money so you don’t get caught off guard. Guest blogger, Sara Bailey, shares super simple ways to get started on building your financial plan.
As a parent or parent-to-be, you likely already know how important financial planning can be for your family’s future. You may have even started your own financial plan at some point, but stopped before you finished, because you weren’t sure what your next steps should look like. If you’re not sure how to get back on track, here are some simple tips that can help solve your most pressing financial concerns when planning your family’s future.
“Having anywhere from 3 to 6 months’ worth of income in your account can keep unexpected bills or expenses from throwing your finances off.”
Starting a family and buying a home are major life events that tend to go hand-in-hand. Owning property can provide parents with an additional asset that can help beef up their financial portfolio. Plus, there are so many ways that parents can use real estate investments to free up cash in the future, from using it as collateral for an emergency loan to refinancing it to get money for college tuition. If this is your first home purchase, one of the most important steps should be hiring a local realtor who can make finding your perfect first family home a less stressful process. Your realtor can give you advice on other steps to take when buying a home, including getting pre-approved for financing and searching for homes.
Saving for college is important, especially since tuition prices will only rise, but you may want to focus on other savings goals before you begin to set aside funds for your child’s future education. If you currently only have personal savings, you can start preparing yourself for parenthood with an emergency savings fund. Having anywhere from 3 to 6 months’ worth of income in your account can keep unexpected bills or expenses from throwing your finances off. You should also think about saving enough for retirement before saving for college.
As you begin to map out short-term and long-term financial goals, you may start thinking about whether to pay down debts. Working to eliminate high-interest debts, including credit cards and personal loans, is always a wise move before you welcome a new baby into your family. If you have larger debts—like a mortgage—looming over you, don’t stress about paying them off completely. In fact, some types of debt can actually boost your financial standing and your credit score, so don’t stress out too much about wiping the slate completely clean when it comes to your debts.
Just as savings can provide a financial cushion for minor money emergencies, having the right insurance coverage can help out when larger financial issues arise. For example, if you and your partner both have life insurance, you will have the peace of mind of knowing that your child’s financial needs will still be met even if you are not around to do so. It’s important that both parents have life insurance, because losing the primary caregiver can result in more financial pressure than losing the primary income provider. If you own or buy a home, you also need to find the right home insurance to help out with unexpected home repairs and expenses.
Last, but certainly not least, are concerns about welcoming a new baby into a comfortable and safe home. While this may seem like a small financial responsibility, especially when compared to the major expenses mentioned above, getting your home ready for a new little one can still cost a small fortune. Outfitting a nursery and childproofing a home can require some serious spending, but there are a few tricks you can employ to keep baby expenses low. Buying second hand baby clothes and gear, as well as searching for online coupons, can help trim your baby budget.
A financial plan serves as the blueprint for your family’s future. Therefore, it’s important to make sure you invest your time in smart and comfortable strategies, like the ones above, so that you can provide much needed security for your children.
A very special thanks to Sara Bailey of The Widow Net for her amazing advice to help parents plan for their kid’s future. As a widow with kids, she knows all to well how important it is to be prepared when things out of our control happen. For more tips, check her out.
What’s one insight or key takeaway you got from this article? What’s something you’d like to try differently to make sure that your money plan is in check? Leave a comment below and let us know.
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