Just when you thought personal finance couldn’t get any more challenging, it can get a bit complicated when you start growing your family.
Maybe you just have a spouse currently or you might also have children. Balancing everything and ensuring your family’s finances are in order can be tough.
I mean, who has the time to do it all, right?
And add in that money management can be a difficult subject to discuss that can affect your family relationships and marriage. Yikes!
But it doesn’t have to be a time-consuming or difficult process, nor should it be.
What Are Family Finances?
Family finances include all the income, living expenses, spending habits, and financial accounts related to maintaining a successful and comfortable family household.
In order to better your family’s finances, you want to ensure to have specific goals and plans in-place to create a solid financial environment for your spouse and children.
If you need to make adjustments or you are just getting started with financial planning, below are a few easy ways to improve your family’s finances.
Consider Life Insurance
If you have a growing family or currently only married, it’s important to be financially prepared.
What if something unexpected happens like an untimely death and your income is gone? How would that affect your family’s finances and future?
It’s a harsh reality we don’t want to think about, but it’s best to be prepared and ensure your family is financially safe if something were to happen.
And as your family grows and financial responsibilities increase, this could be a good time to secure a life insurance policy.
I know, you’re probably thinking about a few things when you hear “life insurance” like:
- “I don’t have time to do this”
- “I hear life insurance is a scam”
- “I can’t afford it right now”
That can all potentially be true with some life insurance companies, but this is where Bestow is changing the industry for the better.
Bestow makes it much easier, more cost effective, and gives you the ability to cancel at any time.
Whether you want to start with a term life insurance policy with a short-term product or jump into longer-term insurance, you have that option. Plus, plans can start as little as $5 a month.
I think it’s a pretty good deal to feel more peace of mind that your family wouldn’t struggle financially if something were to happen to you.
Budget Like A Family
Ah budgeting, you either love or hate it. I don’t think there is much of an in-between with your feelings when looking at your expenses, major debts, income, etc.
Personally, I’m not a fan of budgets but I do have a basic one created. It’s more of a spending plan to keep track of expenses and to ensure my personal finances are in order.
Yet, for families, creating a budget and being on the same page is crucial to better family financial health.
You’ll want to work with your spouse on the numbers, keep expenses low, and truly understand where your money goes every week, month, and year.
There is nothing wrong with enjoying and spending money if you are taking care of your finances and have a plan in place.
But a budget helps guide you and your family to make better decisions regarding money.
It also may appear like budgeting will take a lot of time, but it really doesn’t. In fact, if you can dedicate an hour a week in the beginning stages, you’ll be in a fantastic position.
You can use spreadsheets to get organized. This was the way I started my own personal budgeting and will once my significant other and I are married next year.
However, if you do need some guidance and help, you have another option.
You Need A Budget helps teach you how to create a budget and help you get your financial life organized. It’s free to use for the first month and costs a whopping $84 a year!
Jumpstart Saving For Your Kids’ Education
It’s no secret that in the United States we have a student debt problem.
And not just debt, but recent grads that racked up money are not finding a decent paying job within their industry.
There are more factors than that, but you get where that is going.
However, another easy way to start to improve your family’s finances is setting up a 529 plan for your child or children. This can help them stay out of debt if they plan on going to college in the future.
So what is a 529 plan? It is a college savings plan that offers tax and financial aid benefits and can be used to save and invest for K-12 tuition in addition to college costs.
Currently, there are two types of 529 plans: College savings plans and prepaid tuition plans.
If you are looking for more information about these plans, how they work, and any regulations, the SEC has all the info you need.
But setting up a 529 plan is pretty easy. Personally, I recommend Vanguard and you can get you set up in just a few minutes.
Here’s why I like Vanguard:
- No enrollment fees, transfer fees, or commissions.
- Minimum initial investment of $3,000
- minimum additional investment is just $50.
- Total contribution limit is $500,000.
Learn more and get started with Vanguard here.
Not only is setting up this plan and contributing great for you to be financially prepared years down the road, but can help limit the burden of student loans for your child or children.
And by taking advantage of a 529 plan, your money has years (pending the age) to grow and compound.
Improve Your 401k
As your career advances, you want to start thinking about retirement as well. If you have an employee-sponsored 401k plan, you want to make sure you are investing consistently.
But no just consistently, but also ensuring your are invested in the right funds, minimizing fees, and capturing as much compound interest as you can.
Your nest-egg is going to be crucial for you and your spouse as you prepare to retire.
Not everyone is going to be an investing master or have the time to ensure they are on the right path. This might be you as well. But, there is a great solution to ensure your 401k is at its best.
The platform is called Blooom, which analyzes your 401k, 401a, 403b, 457, IRA’s, or TSP to uncover hidden fees, provides fund suggestions, and gives you insights to maximize your retirement money growth.
Blooom offers two packages:
- Complete free 401k Analysis
- Paid Package
The paid version not only uncovers the hidden fees, but makes moves to minimize them, grants access to financial help, regularly adjusts your portfolio, security alerts, and more.
Either option will help you make better financial decisions and improve your family’s finances when you are ready to retire.
If your spouse has an employee-sponsored 401k plan as well, make sure they also consider the free analyzer from Blooom too.
Start Talking
I think with pretty much anything in life, communication is a major component for success. This certainly includes your relationships, financial goals, your family’s finances.
People can get funny about money, bills, and anything finance related. But in your family dynamic (spouse and children), you should all be talking about money.
Teaching Your Children
If you have children or maybe or planning on it, it’s good to include them in some finance conversations. Obviously, not something overly complicated in the early years but get them involved so they start learning ASAP.
Your children will start to understand the value of money, saving, and you’ll be instilling great financial values that hopefully they’ll adopt into adulthood.
Talking With Your Spouse
Talking about money with your significant other keeps you both open and honest about what is going on financially. You need to work as a team and get on the same page.
Yes, you both may have particular views on certain ways of doing things and the costs of raising children, but it’s about finding a healthy balance to work together.
And I know the title of this post includes “easy,” and communication might be one of the hardest things to do at first.
But once you get started, it becomes easier and has immediate impacts on your current and future finances. It also helps alleviate any financial surprises, expenses, overspending, etc.
Here are some money tips when discussing money with your significant other.
Final Thoughts
As you go from independent to a growing family, finances are still an important topic and a major part of life. In fact, it’s more valuable as you work with your spouse and children to protect and secure your livelihood.
Whether you are looking to thrive as a family on set budget or looking for more ways to improve your family’s finances, the above five options are great ways to get started.
And these options are pretty easy ways to ensure a better financial future as well as to have more peace of mind that your family will be more financially secure.
How are you improving your family’s finances? Have you explored any of the above steps or going to? Let me know in the comments below.