Finances are one of the most important parts of family life. If you are in poor financial shape, it can affect every single part of your family life, from the school your kids attend to how you interact as a couple.
Organizing and looking after your family finances can be a huge source of stress and confusion, so it is not surprising numerous studies have shown finances are one of the main things couples argue about.
That’s why it’s so important you always talk to your family about finances, and you take the time to very carefully plan every aspect of your financial life together. With that in mind, we’ve put together some great financial planning tips for you and your family…
1. Combine your financial goals
The first thing you should do, as a family, is sit down and discuss the aspects of finance that are most important to you. By doing this, you can work out your own unique facial goals as a couple, by combining what is most important to you both and maybe agreeing to get rid of some unrealistic or undesirable goals.
The idea is to discuss finances as openly as possible so you can come to some kind of agreement and get on the same page financially. It’s so much easier to meet your financial goals and live in harmony together when you’re on the same page, so make this a priority.
2. Develop a budget
Once you have a good idea of what you want to achieve, whether that’s saving $30,000 for a home deposit or adding $100,000 to your child’s college fund before they hit 18, it’s important you create a family budget that will allow you to achieve your goals while also meeting your day to day needs.
Your budget should take into account every cent you bring in and every cent that goes out in bills and leisure costs. Once you have drawn it up, scrutinize it and look for ways you can save. Cut down on unnecessary expenses and put that money into savings and investments you can both agree on, for a stronger future.
3. Make a will
If you’re young and healthy, chances are the last thing you are thinking about is dying, but if you have a family, you really do need to think about it. Making your last will and testament now will ensure that your family, should the worst happen and you pass away, will have a much easier time of it, financially speaking, when it comes to things like going through probate and accessing your estate. The last things you loved ones need when you pass away is to be worrying about your wishes or struggling to pay the bills, so make sure you have a will.
4. Get life insurance
For similar reasons to those above, it is also a good idea that both partners get life insurance, especially if you have a mortgage or other joint debts, or children for whom you are responsible. This will, help to ensure the remaining family are looked after should you sadly pass away.
5. Invest for the future
If you want to retire in comfort and ensure none of you ever have to worry about money again, then not only should you be saving for the future, but you should be making some quell-thought-out investments too. Investments get your money working for you, so if you start out investing as a young family, by the time you get to retirement age, you should have a decent nest egg to keep you in comfort for as long as you need. So, whether you invest in Bitcoin, gold, or the stock market, be sure to always look for ways to make your money grow.
6. Be honest with each other
If you want to avoid arguing over finances or ending up in difficult financial circumstances as a family, you need to maintain a policy of 100 per cent honesty with each other. You should always be totally upfront with how much debt you have or how much money you have in savings, even what your credit score is because to do otherwise could mean that you foster unrealistic expectations within the family or hide secrets that can lead to financial run and backups It’s only fair both spouses know the score when it comes to finances, so be sure to keep them in the loop.
7. Discuss major purchases
Of course, this means it is really important to discuss any and all major purchases with the family before going ahead. A lot of people are of the opinion if it is their own money they are spending then they should be able to spend whenever they want without discussing it, and of course, they can, but it may not be the most sensible option. Why? Because not only will it make your family feel like they are valued, but it will enable you to really look at your spending and see if there is room in the budget for it, or if you buying, say an expensive necklace will mean you can’t all afford that much-wanted vacation a few months down the line. It just makes for smarter money management when you’re in a family situation.
8. Set and review goals regularly
Having financial goals as a family is a great way to keep you all on track and stop you splurging unnecessarily. For example, if you all want to go on vacation in the winter, you’re less likely to splurge on a new pair of expensive boots or really pricey sports tickets when you know it could jeopardize your goal. Of course, it’s important to also review your goals regularly to see how well you are doing and change or modify them as and when a need arises.
Family finances are not as difficult to manage as you think!
