We are pleased to share this article that was written for us by our guest author, Sara Bailey.
Photo via Pixabay by Skalekar1992
Planning for your financial future is a big job, and when you’re a parent, you want to get it right. Finding a solid path for you and your family might be a bit stressful at first, but it’s imperative to make sure you have a firm understanding of your finances and where you stand, both now and in the future. Not only will this help you in the present, but it will also allow you to start making plans for your loved ones in the event of an emergency or simply for their benefit down the road.
Fortunately, getting started doesn’t have to be difficult or stressful. There are several simple ways you can start planning for your financial future, beginning with figuring out whether you can afford to have one parent stay home after a new baby is born. Look at your expenses and create a budget that will be easy to stick to, and ensure your partner is on board; otherwise, it won’t work.
Keep reading for some great tips on how to start planning for your financial future.
Figure Out Your Home’s Value
Since your home is likely the biggest investment you have, it’s imperative to know how much it’s worth. Have it appraised if you haven’t already done so, and start thinking of ways you can add to its value for a potential future sale, including updating certain rooms and making renovations. You can start figuring out your home’s value here.
Pay Down Your Debt
It’s not always easy to start paying off your debt, but it’s important to start doing so as soon as possible. Say no to new lines of credit -- no matter how tempting they may be -- and create a plan for becoming close to debt-free in the next three to five years. Create a budget with your partner that includes credit card payments, and learn how to use cash for most of your purchases.
Life will throw you many curveballs, so it’s imperative to make sure you have some backup. What will you do if your car suddenly breaks down or you or your spouse have an emergency that creates medical bills? Do you have a plan to help pay for your child’s college tuition? If not, it’s a good idea to start a savings account just for those contingencies. Or better yet, start separate accounts that you add to every payday. Keep track of how much you’re putting in and how much interest the accounts are gaining, and stay strong! Don’t dip into those funds for any reason.
Set Up a Life Insurance Plan
It’s something no one wants to think about: leaving their family behind. However, it’s the responsible thing to do, and having a life insurance policy will help ensure that your loved ones won’t be scrambling to take care of your final wishes. Create a will with your partner and seek the help of a lawyer who has experience with final directives. Get detailed so that there will be no questions about what you want.
Creating a solid plan for your family’s needs now will ensure that you never have to worry about what’s coming down the road. Talk to a financial advisor if you feel you need assistance with planning, and stay organized. Keep all your important paperwork together in one place, and tell a trusted family member or friend where to find it should they need it. With a little preparation and some self-discipline, you can start preparing for your family’s future and stay on track.