Does Your Family Have a Financial Plan? Here’s Why You Need One Now

When you look into your sweet baby’s face, you probably aren’t thinking about dollar signs and how life with a little one impacts your finances. Raising children is expensive, though, and your child’s future depends on the financial plans you put into place now. From everyday expenses that start adding up, to long-term plans that require savings, new parents shouldn’t wait to develop financial strategies that keep your family protected.

Look at Long-Term Goals

As important as it is to stick to a daily budget, don’t forget to look at the bigger picture, too. Doing this is just as crucial as those everyday choices because it’s how you make sure your family is on the right track long term.

For example, part of that big-picture plan should include exploring term life insurance. You may not have thought about life insurance before kids came along, but your family depends now more than ever on at least one spouse’s income, if not both. The possibility that one of you could pass away unexpectedly is probably the last thing you want to think about with a new baby, but that baby is exactly why you should think about it now.

Term life is a type of insurance that guarantees beneficiaries will receive a financial payout if the policy holder were to pass away. Most term life policies also ensure that premiums stay level, so you don’t have to worry about rates rising. With this in mind, you should always consider your family’s current situation before getting a quote for life insurance. Above all, life insurance is a safety net that keeps your family’s financial goals within reach, even in the face of unexpected circumstances.

Many families include a home purchase in their long-term plans. A down payment on a home typically will typically require a payment of 5 to 20 percent of the home’s price. Before applying for a mortgage, make sure you access all the necessary documents and that there aren’t any errors on your credit report.

Your Day-to-Day Budget

If you don’t yet have a household budget, Fatherly recommends starting with a budgeting app. A basic budget will help you track the money you have coming in and where it’s all going. Of course, some expenses are fixed, but you may be surprised at where you can find ways to spend less while also increasing savings.

Along with strategies for spending less, your long-term goals also depend on having a savings plan. Do you want to buy a home? Save for college? Take family vacations? How about childcare? Childcare is a major expense for many households. If you need dependable and affordable childcare, allows you to browse over 250,000 listings to find care providers and reviews from other parents.

Whatever your major financial goals are, your family needs a savings strategy to reach them. To do this effectively, Woman’s Day recommends setting up savings accounts that are separate from your spending money. Keeping these accounts separate ensures the money you save stays out of sight and out of mind so you never miss it. Setting aside even the smallest amount in these savings accounts may not feel like much, but it really adds up when you stay consistent.

As a new parent, you know how much your little one depends on your care and attention. Along with these things, they also need financial security. This kind of security can only come from a solid financial plan that includes saving what you can, spending less, and preparing for the future.

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