Tips to Ensure Your Family is Financially Stable
Sara Bailey, Guest Blogger
March 16, 2020
Parents want the best for their children. This is true from the second a child is born and continues all the way through adulthood. Apart from love and guidance, parents can give their children a great life by creating financial security. Although children may not understand the concept, their life will benefit greatly from this stability. Whether you have two children or are expecting your first, it’s never too early to start thinking about the future. Here are some tips to ensure your family is financially stable.
Plan for the unexpected.
Safeguarding against the unexpected and unpredictable is one of the most important steps in ensuring a financially stable future for your family. Nobody likes to think about death or potential accidents, but parents must consider the financial security of their family if something were to happen. Life insurance is an excellent choice for parents to set their families up for financial success in the event of a sudden death. You can use an online estimator to determine the approximate rate you can expect to pay based on characteristics such as age, tobacco use and current health. Estate planning is also a viable option to help you allocate your assets to members of your family should anything unforeseen occur.
Keep a monthly budget.
Trying to manage your finances without a budget is a losing battle. There’s no way to know what you’re dealing with when your income and expenses aren’t tracked accurately. While it is possible to stay afloat with rough guesses, parents should be looking to optimize their savings. Keeping a monthly budget is the first step in the right direction. All you need is a simple spreadsheet separating your monthly income and expenses. Keeping this budget up-to-date will make it easier to make smart financial decisions.
Set aside savings for a home and college.
If you’re currently renting or you own a home but would like more space, you’ll need to save up for down payment before purchasing a new home, but it may be easier than you think. There are many different mortgages available, and many don’t require a 20 percent down payment. For example, it’s possible to take out an FHA loan by putting as little as 3.5 percent down. Just realize that if you purchase a home with less than 20 percent down, you’ll likely be required to pay mortgage insurance.
College tuition prices are continuing to rise and show no signs of slowing down. If you have a desire to help your children with college tuition, you should set aside a portion of your check each month. If you’re not in a financial position to set aside a considerable amount, still make an effort to place at least a little toward this fund. It will compound over time, and you can start adding more when your finances allow. Don’t forget to look into tax incentives given to parents saving for school.
“College tuition prices are continuing to rise and show no signs of slowing down. If you have a desire to help your children with college tuition, you should set aside a portion of your check each month.“
Start thinking about retirement.
If you still have a good 40 years of work ahead of you, thinking about retirement may seem like overkill. When it comes to having a financially secure retirement, however, it’s never too early to start planning. Recent generations who are currently working will face an unprecedented shortage of social security benefits and pension payouts compared to past cohorts. It’s advisable to start a 401k or other savings account specifically for retirement as soon as you start a full-time job. Your 65-year-old self will thank you for having the foresight.
Plan the splurges carefully.
Creating a stable future for your family isn’t just about spending money on the right things; it’s also about knowing when not to spend. There are times when you’ll want to splurge to treat the family to a vacation, concert, or other fun event. It’s important to know how these expenses will impact your financial standing later on. The cost may seem insignificant at the time but end up causing stress and anxiety later down the road. That’s why it’s important to plan these splurges well in advance so you’re not dipping into savings that are earmarked for something else.
Planning a financially stable future for your family isn’t rocket science. It does take some consistency, investment, and a lot of hard work, but it is doable. You’ll be much better off by implementing these tips as soon as possible.
Please visit Sara Bailey’s website, Thewidow.net, for more articles, resources and information.