Just when you thought personal finance couldn’t get any more challenging, it can get a bit complicated when you start growing your family. Maybe you just have a spouse currently or you might also have children. Balancing everything and ensuring your family’s finances are in order can be tough.
I mean, who has the time to do it all, right? And add in that money management can be a difficult subject to discuss that can affect your family relationships and marriage. But it doesn’t have to be a time-consuming or difficult process, nor should it be.
1. Consider Life Insurance
If you have a growing family or currently only married, it’s important to be financially prepared. What if something unexpected happens like an untimely death and your income is gone? How would that affect your family’s finances and future?
It’s a harsh reality we don’t want to think about, but it’s best to be prepared and ensure your family is financially safe if something were to happen. And as your family grows and financial responsibilities increase, this could be a good time to secure a life insurance policy.
2. Budget Like A Family
Creating a budget and being on the same page is crucial to better family financial health. You’ll want to work with your spouse on the numbers, keep expenses low, and truly understand where your money goes every week, month, and year.
There is nothing wrong with enjoying and spending money if you are taking care of your finances and have a plan in place. But a budget helps guide you and your family to make better decisions regarding money.
It also may appear like budgeting will take a lot of time, but it really doesn’t. In fact, if you can dedicate an hour a week in the beginning stages, you’ll be in a fantastic position.
3. Jumpstart Saving For Your Kids’ Education
It’s no secret that in the United States we have a student debt problem. And not just debt, but recent grads that racked up money are not finding a decent paying job within their industry.
There are more factors than that, but you get where that is going. However, another easy way to start to improve your family’s finances is setting up a 529 plan for your child or children. This can help them stay out of debt if they plan on going to college in the future.
So what is a 529 plan? It is a college savings plan that offers tax and financial aid benefits and can be used to save and invest for K-12 tuition in addition to college costs. Currently, there are two types of 529 plans: College savings plans and prepaid tuition plans.
If you are looking for more information about these plans, how they work, and any regulations, the SEC has all the info you need.But setting up a 529 plan is pretty easy. Personally, I recommend Vanguard and you can get you set up in just a few minutes.
4. Improve Your 401k
As your career advances, you want to start thinking about retirement as well. If you have an employee-sponsored 401k plan, you want to make sure you are investing consistently.
But no just consistently, but also ensuring your are invested in the right funds, minimizing fees, and capturing as much compound interest as you can. Your nest-egg is going to be crucial for you and your spouse as you prepare to retire.
Start Talking
I think with pretty much anything in life, communication is a major component for success. This certainly includes your relationships, financial goals, your family’s finances. People can get funny about money, bills, and anything finance related. But in your family dynamic (spouse and children), you should all be talking about money.
If you have children or maybe or planning on it, it’s good to include them in some finance conversations. Your children will start to understand the value of money, saving, and you’ll be instilling great financial values that hopefully they’ll adopt into adulthood.
Talking about money with your significant other keeps you both open and honest about what is going on financially. You need to work as a team and get on the same page. Yes, you both may have particular views on certain ways of doing things and the costs of raising children, but it’s about finding a healthy balance to work together.