3 Financial Planning Steps
That Can Help Parents Protect Their Families
Financial Planning Steps – It’s critical that parents plan for the future. It’s easy to forget how important it is to take financial planning steps to protect your family.
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Financial Planning Steps
There’s no doubt about it: Raising kids can be expensive. Some of the most recent estimates put the overall cost of caring and providing for a single child at around $233K. And, that figure will only go up as families grow.
So, if you are a parent, you need to do some serious financial planning. Prepare yourself for the expenses ahead, and make sure your family is taken care of no matter what the future holds.
To help get you started with this process and make it less confusing, here are a few basic financial planning steps every parent needs to complete, to give themselves peace of mind and provide for the future of their children:
Do Some Estate Planning
Estate planning isn’t just for the wealthy. Proper estate planning is crucial for anyone who wants to ensure their last wishes are honored, and that their loved ones are protected if the unthinkable should happen. For parents with young children, this means making the necessary arrangements to have their children cared for even if they are not around to do so themselves. This normally includes purchasing life insurance.
If you are unsure how much insurance you need to protect your family, use a life insurance calculator. Determine an amount that would keep your loved ones financially stable in the event of a tragedy. This way, you can also see what premiums you can expect from suitable policies. In addition to life insurance, you will also want to work with an attorney to draft a will. This is where you can legally designate guardians for your children. This will protect them from any risk of going through the foster care system until a guardian can be appointed.
Create Savings Goals
While you are thinking about the future, you should also think about other life events that could impact your finances. This will allow you to come up with savings goals. Plan to reach positive milestones, like buying a home or sending your kids to college.
Becoming a homeowner usually comes before paying for college, so focus your efforts on this savings goal first. You will want to put enough money aside for things like closing costs, maintenance expenses, and any down payment requirements. You should make sure your finances are prepared to weather potential storms as well. For your home, this means creating a separate savings goal for your emergency maintenance fund. You should aim to save at least 1% of your home’s value each year for unexpected home repairs.
Of course, you should also be prepared for personal emergencies, like losing a job or falling ill. So try to set aside enough savings to cover at least three months’ worth of expenses for your family.
Build a Solid Family Budget
Once you have your savings goals sorted out, you will need a financial plan to help you reach them. This is where having a family budget can really help you stick to your overall financial plan.
If you prefer to work out your finances and plans in writing, you can use online templates to make drafting your household budget easier. Select a template that will be the simplest for you to work with and stick to over time, but also keep any additional budgeting templates in mind for special events like weddings or vacations.
You can print out your completed budget and keep it in a prominent location around your home for easy reference, or if this process feels too complicated, you can always use a budgeting app. These apps allow you to simply link your bank accounts and plug in financial information to create your household budget, and most of them offer saving and investment tips to help you grow your nest egg.
Protecting your family financially and helping your children grow into happy, healthy adults can be expensive, but these costs don’t have to catch you off guard. If you take the time to complete a few financial planning steps, like the ones above, you can make sure that you and your family are prepared for any change or challenge, and be able to maintain financial stability along the way.
Guest Post by Sara Bailey
Thewidow.net | firstname.lastname@example.org
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