When you’re just starting as a couple, you feel you have all the time in the world to get your finances in order and prepare for your future. Once you begin planning for a family and are patiently awaiting your little one’s arrival, you think ahead, envisioning your goals for them — college, getting established and getting married. You want to help them pay for these things but lack a firm plan to get you there.
Then, in the throws of parenthood of an infant, toddler, child and then teen, financial planning seems like the least important among the laundry list of things you need to worry about each day.
The effort is worth it. A financial plan covers your current situation and prepares your financial future. It allows you to save and invest to prepare for retirement and help your kids reach their goals. Planning your financial future now has a myriad of benefits over waiting or winging it.
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Sets a Good Example
Children watch and listen to everything you do. The example you set right now will shape their future in more ways than you could imagine. Watching you make firm, attainable goals for your finances sets your kids up to do the same.
Remain open with them through the process. Let them see and know as much as possible. This way, they’ll enter adulthood with at least a basic idea of how to manage their money and plan for their futures.
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Helps You Live Within Your Means
The most integral part of planning your financial future is setting up the present. Having a financial plan in place requires you to create a budget. Each month and year, you’ll know how much you can spend on essentials and invest. You’ll also see the amount you can designate to more frivolous purchases and still meet your goals. With a financial plan, you won’t have as many surprises and can stop living paycheck to paycheck.
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Improves Your Parenting
Knowing where your money is going each month and having a plan to save for your future dramatically reduces your stress levels. When you’re less concerned with your finances, you can focus more on what matters — your kids. You’ll be more present with them when your mind isn’t wandering to how you’ll pay your next bills, help your kids with college or save for retirement.
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Reduces Fights Over Finances
You’ll also fight significantly less. Money is a common cause of arguments for couples, especially when finances are tight and debt is high. Creating a plan to get out of debt and setting a budget reduces those concerns. Couples can spend more time loving each other than arguing over how to spend their funds. Your kids will greatly benefit from having a safe home where their parents get along more often.
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Gives You Something Solid to Work Toward
It’s impossible to reach a goal unless you set one. Leaving everything to chance and hoping for the best almost always results in a disaster. However, a financial plan gives you something solid to work for. You’ll have a clear path and action plan, making you ultimately more successful. For example, an ideal baseline retirement savings goal would be to have the equivalent of your salary by the time you hit 30.
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Lets You Take Advantage of Long-Term Strategies
Many methods for securing your financial future rely on decisions you’ll make right now. You may need to change some things on your taxes, like claiming your kids’ education credits on your taxes and investing your money. The sooner you can set these steps in motion, the more you’ll be able to save by the time you need extra cash.
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Helps Your Kids as They Grow
Do you dream of helping your kids pay for college, their first apartment or a wedding? Then you need to start saving as early as possible. Each one comes with a hefty price tag, so you’ll need to have money set aside already if you’re going to make a dent in what they owe.
You should also encourage your kids to set aside their own money while they live with you so they can contribute. You can share the responsibility of planning for your family’s financial future. Make your kids partially responsible for saving for big-ticket items like their car and college.
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Gives Your Kids a Clean Slate
There’s no easy way to say it — dying is expensive. Planning for your financial future here in the present can significantly reduce the burden your death lays on your kids. Save money for a nursing home, end-of-life care and your funeral expenses. You should also make an effort to have all your debts paid off.
Then, when you eventually die, your children will be able to grieve you instead of the mountain of debt you left them with.
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Prepares Your Family for the Worst
How would your kids fare if you died tomorrow or got seriously injured? No one likes to think about these things, but unfortunately, it could happen, and your family would rely on your financial plan to get them through the tough time.
You should set money aside in an emergency fund. You’ll also want to cover your loved ones with a current will and life, health, and disability insurance.
While these preparations are less than fun, you’ll rest easier knowing you’ve cared for your family if anything happens to you.
Comfort Your Family With a Financial Plan
With all these reasons, it’s hard to deny the benefits of preparing for your financial future. A plan will improve your monetary choices in the here and now, setting you up for success down the road. Your whole family will benefit from the changes you implement and the outcome.
