Starting a family is an exciting time. But along with the joys of family life, you’ll be assuming a considerable amount of responsibility, particularly financial. These tips will help you make some monetary preparations beforehand so you can hit the ground running.
If you adapt good financial management skills now, chances are, your children will pick up on those traits as they grow older and spend time watching you put them into practice. A good example is an excellent teacher.
As you learn new financial skills to share with your youngsters, develop a system to track your monthly expenses. If you use credit or debit cards, you’ll have a built-in record in your monthly statements. Otherwise, you’ll need to write expenses down another way and categorize them appropriately into groups such as mortgage payments, grocery bills, emergency expenditures, and so on. Compare these numbers against what you earn monthly to ensure you are not spending more than you make.
Plan to Save
This is a tried and true practice of building financial security. Get in the habit of setting a little money aside as often as possible in order to have a reserve for large purchases like buying a house, handling emergencies as they arise, or even to helping a child finance his or her college education.
Seek Professional Guidance
As needed, consider enlisting the help of a financial planner or other professional to get your finances in order and prepare more thoroughly for your future. A financial advisor could be aware of other good savings options to benefit your family.
Life insurance is a common option people use to ensure their loved ones will have an income resource should a parent pass away. Term life insurance and whole life insurance are familiar options, both offering slightly different rewards. With term life insurance, the beneficiary will be paid the face amount of the policy at the insured’s passing. Whole life insurance operates on a similar principle, but also builds cash value which a policy holder can borrow against. Life insurance rates for these two different policies can vary greatly; whole life insurance will be more expensive. Again, this would be a good time to consult with a licensed professional who will answer any questions you may have and help you chose the option that’s best for you and your family’s needs.
It’s Not Too Late
Of course, family financial planning lessons can start even when you already have kids. Sit down with your children and explain to them how a budget works, that you have bills which must be paid, and if necessary, where you plan to make spending cutbacks. Keep the information you offer age-appropriate, as you don’t want your kids worrying unnecessarily about your family’s finances. If required, go back now and start talking with the professionals who can help you get on track.