Start Your Family Financial Plan EarlyMarch 21, 2017
Everyone knows that ideally they should have a financial plan for their future, but sometimes life distracts us and time goes by as it always does. The good thing is that it is never too late to start thinking about ways to get that back on track and protect your family’s financial future.
By Jackie Waters, special to The Home Front
Start by taking inventory of your current financial situation. Figure out exactly how much income is coming in and how much is going out. Do not ignore any debt that you owe- it will only grow and become a bigger burden down the road. Learn from the debt you occurred and vow not to get in deeper.
- Budget. Creating a budget will be one of the most important things you do to get on track to a good financial plan. It can make you aware of negative spending habits and prioritize where you spend your money. Tracking spending will help you find ways to divert money into savings instead of spending on unnecessary items.
- Goals. Decide what your financial goals need to be. Do you need to save for college tuition for your children? Do you need to save for a move from a rental to a home of your own? Or do you have long term health issues for any member of your family? Once you identify your goals, you can start to save for these real priorities on your horizon.
- Debt. Paying off your debt first is actually an investment in your future. Debt does nothing for you except grow every month you keep it around. Come up with a reasonable plan for eliminating it, whether it is by rolling it into lower interest rate credit cards or paying of steady chunks of it every paycheck. Getting debt out of your life will free you up to save more money in the long run for what you need.
- Savings. If you haven’t already, start an emergency savings fund to cover you and your family in case you are suddenly unable to work or are ever without a job for a period of time. A good goal amount is 3-6 months of regular income in an account that is easily accessible. You should also include money in this account for planned expenses such as car maintenance or repair, home appliance replacement, or anything else you know you will need money for.
- Insurance. Assess your insurance needs. Keep in mind that life insurance is only about replacing an economic loss that your particular family would incur, instead of thinking about it fearfully or emotionally. When people start to approach it emotionally, they often purchase way more than they actually need to keep their family comfortable.
- If your employer offers a retirement fund, make contributions to it. They often contribute some or match funds so it can be extremely beneficial in the long run
- Retirement. Check into traditional or Roth IRA’s. These are individual retirement accounts that can provide tax advantages that vary depending on the one you choose. They can be used for different savings purposes, so make sure you investigate both types to determine which would benefit your family’s needs.
- Social Security. Don’t forget to check into your social security benefits. They pay about 40% of what you earned as income pre-retirement. For more information or to use their retirement estimator, go to ssa.gov.
- Financial adivsor. Hire a financial advisor to help you learn about investments that could be good for your particular situation. A good financial advisor will give you advice and not try to coerce you into buying into anything. They can be unemotional about where you could put your money, which is very beneficial since it is difficult for most of us to take that approach with our own finances.
Look online for help with a financial plan or to find an advisor in your area. A majority of information on different accounts and investments can be found online, so become an expert and seek the professionals for the rest. If you stay on track with your financial plan and avoid getting derailed by debt and overspending, you can be on your way to a secure financial future for your family.
About the author
Jackie is a mother of four boys, and lives on a farm in Oregon. She is passionate about providing a healthy and happy home for her family, and aims to provide advice for others on how to do the same with her site Hyper-Tidy.com.
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