When you start a family, you may end up getting a bit of a shock financially. We always think of the baby must-haves, the lack of sleep ahead of us and the change in lifestyle but how about the costs and providing for their future? The cost of raising children is so much higher than people realise and that can become a big worry. That’s why it’s so important that you start planning your financial future right away.
These are some of the best ways to secure your family’s financial future:
Your first instinct is probably to take all of the surplus income that you have and put it all into savings accounts for your kids, but that’s not actually the best way to secure your financial future. If you’re not in a good financial position right now, you won’t be in one to help your children out with their education or whatever else they may need later on. That’s why you need to be selfish to some extent and look after your own financial needs before you start thinking about theirs. That means paying down all of your debt and putting money into your retirement fund. If you can put yourself in a strong financial position, you’ll be better equipped to help out your family in later life.
Set Up A Trust
When you do start saving money for the family, it’s important that you protect it properly. Writing a will is important but, often, it’s best to set up a trust. Professional companies like Philips Trust can help you protect your money with a family trust. Avoiding large taxes on money is one of the major benefits of setting up a trust so your children will get more. It also makes it a lot easier to split up your estate after you’re gone so your family doesn’t have to deal with all of that during a difficult time.
Set Clear Financial Goals
Preparing for the future isn’t just about saving up as much money as possible in a savings account, you need to have some idea of what you’re trying to achieve. It might be that you want to save up enough money for college education for your kids or you want to help them out with a deposit on their first home. Financial goals can also be to do with quality family time as well. For example, you might want to save more money for family holidays while the kids are living at home. It doesn’t matter what your goals are, but you need to have some. If you have financial goals, it’s easier to know how much you should be putting aside and whether you’re on track.
If you or your partner get ill or have an accident and one of your passes away, that can leave your family in a very difficult financial situation. Suddenly losing a big chunk of income will make it so hard to meet any financial goals that you have. But you can make that transition easier for your family if you have good life insurance cover. It’s best to buy life insurance sooner rather than later for two reasons; first off, you never know when something could happen to you. Secondly, it’s a lot cheaper to take out a policy when you’re younger and healthier.
It’s never too early to start making plans for your family’s financial future and if you leave it too late, it’s going to be a lot harder.
*This is a collaborative post. For further information please refer to my disclosure page.