Financial Planning for Families

3 Financial Tips For Established Families

In Financial Planning Tips by Inunison

Identify Your Financial Priorities

Acknowledging that you need priorities is the first step! Most of us muddle through our financial lives, spending to meet the day-to-day expenses that dominate our attention. Unfortunately, that approach risks leaving your most important objectives unfulfilled. In order to achieve your goals, you need to make them concrete.

Make a list. Write down a list all the things that you’d need to feel secure, happy or fulfilled. These can range from the weighty (getting out of debt) to the luxurious (a beachfront retirement home). As you write, try to define the goals as much as possible—in what oceanfront town? How many blocks from the beach? How many bedrooms? and estimate a price tag for each.

Rank your list in order of importance. That’s not as easy as it sounds, since financial goals continually collide with one another. Paying for a child’s braces may rob money that would otherwise go into his university fund, for example. And saving effectively for your kids’ university can wipe out any hope of putting aside adequate money for your own retirement.
If you are struggling to prioritize between two important goals, as yourself: Will one of the goals benefit more people than the other? Which goal will cause the greater harm if it is deferred?

Most people, for example, have to decide between banking money for the kids’ university fees or their own retirement savings. If you know that you won’t be able to live adequately on the money you expect from your pension and Social Security, then retirement savings should be paramount. That child in university can take out a student loan such HELP debts, but there aren’t loans for retirement.

With all that said, there’s no reason you can’t tackle a few goals at once. Just keep it to less than five, as having too many objectives will make it hard to get to the finish line on any of them.

Debt Reduction

This is the holy grail of personal finance, but if you can’t utilize this secret you’ll never be able to save money. You simply have to spend less money than you earn and there’s no way around that. It’s all about cash flow.

If you earn $100 and spend $110 you’re now at a -$10. Where does that extra ten dollars come from? Usually it’s borrowed money, either from a credit card or some sort of loan. And guess what? That borrowed money comes with interest. That means you’re actually more than ten dollars in the hole.

Once you begin to do this on a regular basis month after months and with large dollar amounts it’s easy to see how someone can get tens of thousands of dollars in debt, which is exactly why most people feel as if they don’t have any money to save.

As this debt mounts you may find yourself just making the minimum payments each month, but that in turn just means you’ll be spending the next ten or twenty years paying for something you couldn’t afford, spending thousands on interest.
If you currently have credit card debt this is something we can help you reduce before starting your savings plan journey.

Protecting Your Family

Most people overlook and don’t realise the importance life insurance plays when preparing one’s estate planning. Life insurance policies not only includes death cover it also includes disability/trauma insurance and income protection.
In the event of your partner’s death which may happens to be the breadwinner life cover can provide you the best protection.
Most families carry a lot of debt especially young families which can result in devastating effects on the death of a partner.