Financial Planning as a Parent: How to Prepare for the Future

Preparing for the future when you have little ones to think about can be stressful, especially if you haven’t started saving or making plans for how to remain financially comfortable. Creating a budget, investing, buying a home, and adding to a savings account or 401K are all great ways you can begin the process. But there are variables to consider. In order to prepare for these activities, you need to take into account your credit score, your income versus expenses, and where the next five years will take you. For some parents, the option to have more children is on the table, and that has to be included in the plan as well.

Here are some things to think about when you’re ready to save for the future.

CONSIDER REAL ESTATE

Investing in real estate can be a big step for families, as it not only provides a stable home, but it also provides a meaningful asset to young parents. If you’re just starting out and aren’t sure how to go about getting started, get organized first/ This will help make sure the process isn’t overwhelming for you. This may include gathering the necessary paperwork, looking for an experienced realtor, getting pre-approved for a loan, and thinking about a realistic budget. Doing these things ahead of time will reduce stress as you move forward with one of the biggest purchases you’ll ever make. Keep in mind that some research will be necessary as well, so you can find the right home in the best neighborhood for your budget.

START SAVING

You may be thinking that saving money sounds much easier than it actually is, but that doesn’t have to be the case. In fact, there are several things you can do to cut back on everyday costs to sock some cash away for the future, from meal-prepping healthy dinners to carpooling so you can save on gas. Every penny saved truly adds up if you commit to it, so talk to your partner and family members about how they can get involved as well. Learning how to use coupons at the grocery store, how to utilize deal sites when you’re buying something you need, and how to lower utility bills are just a few great ways you can be a bit more frugal. And if you want to ensure you’re saving smartly and that your finances are on track, don’t hesitate to reach out to professionals for help. In fact, getting in touch with financial experts such as freelance accountants is as easy as hopping onto your computer or tablet and signing on to a job board. 

If you’re concerned about getting control of your debt, including credit card and medical bills, reach out to the professionals at DebtMD. Together, you can work with the company’s experts to find a solution and get your finances back on the right track.

BUY LIFE INSURANCE

While few of us want to think about leaving our loved ones, it can be helpful to start planning for that moment a bit early. Buying life insurance is a big step toward ensuring that your partner and children are taken care of in the event of your death. Take a look at different policies to get an idea of what you need and want. Some will only be beneficial after so many years of premiums, while others will help pay for medical bills and debts as well as funeral expenses (which can easily run around $15,000 and up). Keep your loved ones in the loop so they’ll understand what to do when the time comes.

CREATE AN EMERGENCY FUND

Every family should have an emergency fund, if for no other reason than to ensure that unforeseen household repairs will be taken care of. If you own a home, chances are you’ve already experienced costly projects or repairs. The hot water heater, roof, and major appliances are some of the priciest areas of the home to fix or replace, and if you’re hit with an emergency at the wrong time, you’ll be between a rock and a hard place. Create a fund that you contribute to regularly but never touch so you’ll have peace of mind.

Financial planning takes a lot of work, and as a parent, you may be worried about how you can plan for the future to prevent issues for your children. Don’t try to do it all at once; baby steps will ensure that you’re on the right road and that you’re able to keep saving.

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