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Financial Planning

5 Essential Tips for Securing Your Family’s Financial Future

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Even though the times of strict patriarchy are long gone and the world has made great strides to make equality an essential element of a modern household, the father still remains a key supporting figure in the lives of his family members. Whether you are the sole provider or are sharing the financial burden of raising a family with your significant other, your top priority should be to secure the financial future of your home, your kids, and your spouse.

Naturally, this is a cumbersome goal that cannot be achieved solely with determination and wishful thinking. Rather, it requires careful planning and meticulous execution in order to come to life. Here are the five essential tips you need to follow in order to secure your family’s financial future.

Leave no debt hanging over their heads

It might sound a bit counterintuitive, but the first thing you need to think about is yourself. You need to resolve all outstanding financial issues in order to reduce debt and prevent it from falling on the shoulders of your loved ones when you’re gone. What’s more, it’s essential that you start planning for your retirement.

Creating a retirement plan will allow you to preserve your financial independence in your silver years, and thus alleviate the financial pressure of caring for your well-being off of your children and other family members. Remember, as a father and a man, you need to be able to take care of yourself in your old age, or at least pay for professional care – don’t expect your children to carry the burden.

Setting goals should be a priority

If you don’t know what you’ve set out to achieve, then you’re never going to achieve it, simple as that. Raising a family and maintaining a solvent household in the process is a difficult task, but it becomes downright insurmountable when you lose track of your finances or if you don’t know what your mid-term and long-term financial goals entail.

With that said, it’s time you set some S.M.A.R.T. financial goals in order ensure your family’s happiness while being able to withstand all financial difficulties in life. From home remodeling to sending your kids off to college, these are all goals you need to plan for well in advance.

Build a financial legacy for your family

One of the most essential elements of a financially-stable household is insurance. Your home needs it, you need it, and your family members need it. There is no way around it – you can never know what tomorrow might bring, and you need to be able to meet all financial challenges head on.

Most importantly for a modern father, you need to make sure your family will be taken care of in the unlikely event that you’re no longer able to. Life insurance is the foundation of family budget planning as it allows you to plan your future without fear, knowing that should you perish, your financial legacy will keep your family solvent for years to come.

Diversify your income stream

Another important thing to remember is that there is no guarantee that you will be able to keep your job over the years, nor that your earnings alone will be enough to support your family through its numerous milestones in life. If you want to establish true financial independence, you will need to diversify your income stream.

In essence, you need a side hustle that won’t take up too much of your time, preferably something you can establish as passive revenue that requires minimal daily effort on your part. Consider online freelancing jobs, something close to your primary skillset and knowledge base that you can monetize in a short timeframe.

Establish a financial fund for every goal

On a final note, consider creating a financial fund for every major milestone in your life and the lives of your family members. Allocating a certain amount of financial resources every month towards a goal is an excellent way to keep yourself accountable and actually reach it, no matter if you’re saving up for your kids’ tuition fees, an emergency fund, or your retirement. Make a fund, and make it a priority to contribute every single month.

Conclusion

Creating a financially-stable future for your family is not something you can achieve overnight. This is a cumbersome project that will require a sound battle plan and a determined mindset, so follow these essential tips in order to pave the road to long-term solvency for yourself and your loved ones.

Parenting 101: How to Teach Kids Money-Saving Tips

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Are you hoping to raise financially stable kids? Have you thought about the process moving forward? If not, you should. That’s because encouraging kids to have a positive attitude about money early on can have a lasting effect on their spending habits as they mature and grow older. Continuing to praise good financial behavior while offering advice along the way will also help them become more responsible and teach them about financial independence.

So, without further ado, here are some simple ways to engrave positive spending habits and financial responsibility into your child’s daily routine that will get them started on the right path towards financial success.

Money-Saving Tips

Be Honest About Your Financial Past: The vast majority of parents at some point in time has had their fair share of bad spending habits – whether they ran up their credit card bill or bounced a check (or two). Whatever you do, resist the urge to come clean about everything you did wrong with your finances. Remember: you’re talking to your child, not a financial advisor.

But what if you’re answering questions?

Well, if you’re answering questions directly, pick and choose which financial sins you’ll shed light on without putting yourself in a bad position. Stories of taking everything out of your savings account to travel with an ex or blowing through your 401(K) account because you didn’t plan on buying a house are suitable tales to share – as long as you learned from your mistakes. That’s because these are situations that can take months – if not years – to overcome.

Introduce Them to Money Early On: Once your child is old enough to count, include simple economics into their daily routines. When you’re in the grocery store, for example, explain to them why it’s better to choose the vegetables that cost less per pound or why you chose the generic package over the name-brand one. Don’t forget to explain to them that by saving $20 on this grocery trip – through loyalty discounts and coupons – the family will have an extra $1,000 at the end of the year to spend on something fun like a vacation or a birthday party. That way, they too will start paying attention to the environment around them and most importantly, value the efforts you’ve made from a financial point of view.

Encourage Them to Manage Their Own Money: Did you know that getting an allowance can be a good way for children to learn about having money? In fact, experts believe that allowing your child to manage their own money helps them better understand its value and learn the difference between wants versus needs. That’s why it’s important for parents to provide opportunities for their child to earn money by doing extra chores around the house – like yard work – or push them to search for a part-time job once they’re old enough. In doing so, they’ll realize that hard work pays off.

As your child grows older and becomes more mature, make sure you teach them about the three-bucket approach or the three portfolios that consist of the traditional mutual funds. That said, help them open a checking account and don’t forget about the savings either. Not only does it serve as a great motivator, it’s also the best place to put your cash savings. After all, savings accounts have lower interest rates – a topic you can cover with your child later on when they’re ready.

Teach Them About Budgeting Basics: Speaking of budgeting basics, teaching your child about saving, spending, and sharing – the three-bucket approach – can help tremendously. For younger children, try using a clear jar so they can watch their money grow over time – and see it disappear when they withdraw from it to make purchases.

  • Saving: As most parents know, saving is an important part of managing your finances. The same goes go for your child. Just because they don’t have car payments and mortgages to pay for doesn’t mean they won’t benefit from this lesson. So encourage them to set aside a portion of their money they receive for future things – like bikes, skateboards, and video games they really want.
  • Spending: Even though no one like to spend their hard-earned money, allowing your child to decide on what they want to buy will teach them about money transactions. If they make a crazy purchase they’ll regret later on, they’re less likely to make the same mistake twice. For instance, if they buy too many snacks from the store, then they won’t have enough to buy anything else in the near future. This will encourage them to change their habits as consumers.
  • Sharing: In short, encourage your kids to share their fortunes with others – whether it’s a local fundraiser or a national charity. That way, they’ll understand how their money can help others.

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Thanks for the read! Did I miss anything important? What are some other ways parents can teach their children about money-saving tips? Feel free to leave a comment below.

A Dad’s Quick Guide To Parenthood While Managing A Mortgage

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Being a role model to your kids is a difficult, but noble, task. A dad’s job isn’t just to discipline their children or to be the “other person” to ask when mom won’t allow anything, or to be the one with the “corny” jokes. A dad is just as responsible as the mother to make sure his children are good, productive members of society. Easier said than done; parenting is a full-time job. When financial situations like managing a mortgage happen, parenthood can become significantly more difficult. It’s hard to juggle your fatherly obligations and financial obligations simultaneously. However, it’s not impossible for dads to be good parents while managing a mortgage.

Remember, a mortgage is a common thing: other people manage it, and you can too.. It might not be easy to deal with, and it sure won’t disappear as fast as a boo-boo or a doo-doo but it’s not an impossible task. It takes time and patience. This quick dad’s guide to parenthood while managing a mortgage will prove to be an invaluable tool.

According to Due, while getting yourself your own home is part of the American Dream, managing the burden of a mortgage debt can be a massive undertaking. This is especially true if you have a family to manage and the expenses that come along with it. As a dad, it can be overwhelming to think about mortgage and at the same time worry about your children’s education and your daily expenses. However, managing a mortgage while parenting isn’t impossible. Perhaps it’s a matter of prioritization and knowing what to do.

Study The Mortgage During Breaks

When you’re a father, chances are you’re going to be very busy. This includes your own set of household chores, your responsibilities with your children, and even making sure everything is in tip-top shape. You will barely get a break for a good cup of coffee or a can of beer! However, instead of sitting on the sofa and watching a good game, you may want to take the time to learn more about your mortgage instead.

  • Try as much as possible to assess your finances. As soon as you get your outstanding balance, the earlier you get yourself the numbers you need to pay, then the better chances you’ll have of being able to manage your finances properly.
  • Also, try to learn more about mortgage points. Lenders more often than not send people with mortgages with loan rates and things called “points.” A point equates to a single percent of the total loan amount. You can get discount points or interest in the mortgage in prepaid which lowers the interest the more you pay. You can also get origination fees, or things the lender will have you pay because of the costs to create the loan in the first place. If you have the money, it might be a good idea to invest on these points so you can save more money.

Pay Debts, Pay Extra

Regardless of whether or not you’re single or married, it’s best you sit down and assess your current finances in relation to your mortgage. This is important as a lot of the management tips for dads below will revolve around how much you are willing to spend on a mortgage and your other finances.

  • If possible, try to get a hold of the current debt you have and try to figure out just how much you need to pay them off. If there’s a way to repay them as soon as possible, then do so as this allows you to focus solely on the mortgage. Clearing debts can help clear your mortgage because then you won’t have to pay interest on those debts too.
  • If you can, pay a bit more than the original repayment fees for your mortgage. Making extra payments every now and then can actually help you save more as this increases your chances of decreasing interest. There’s a possibility that an extra payment now can save years off your overall time to repay.
  • Try to figure out if paying in an alternative method is the way to go. It might be better to alter the frequency of payments. For instance, if you’re capable of paying off your mortgage biweekly, then this might be beneficial for you. This means paying half of the month’s repayment costs once every two weeks. Since there are 26 bimonthly periods in a year, you have the opportunity to make an extra monthly payment annually. This can significantly shorten your time to repay your mortgage.

Spend Less, Spend Smart

This is the time when you have to sit down with your family and talk with them about the situation. Paying off a mortgage isn’t easy with a lot of expenses, and if you want to pay off the house early, then you’ve got to make tough calls. This means making sure everyone understands that there’s a need to budget and spend less on things you don’t need.

Try to assess if there are extra expenses you can cut off, including eating out regularly, subscriptions to various services, or something that can be substituted with something cheaper. For example, having a garden can help you save money by cutting out the grocery store overhead.

Conclusion

Dads take the front seat when it comes to parenting while managing a big challenge for the whole family. This doesn’t necessarily mean their partners won’t be there to help them out, but this guide tackles just how dads can be just as awesome as parents as they are reliable when it comes to handling their family’s financial stability. It may be difficult, yes, but help is out there if you need it. If you think managing a mortgage is getting tricky as a dad, you may need financial assistance or real estate information in the form of proper consultations. Click here for more information.

The True Cost of Children: How to Budget for Having Kids

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If you’re thinking about starting a family or already have a baby on the way, you’re more than likely preparing yourself for months of sleep deprivation, filthy diapers and lots of kid shows.

You’ll also probably flinch every time someone tells you how much a baby will change your life. Well, they’re right. It will. Preparing for Parenthood isn’t just about tiny clothes and breathtaking ultrasound pictures; in fact, it involves a lot of financial preparation as well.

The average cost of raising a child from birth until 18 in the U.S. is approximately $245,340 (or $304,480, depending on inflation). This includes the cost of clothes, food, healthcare, housing, transportation, toys and other entertainment.

Prices will, of course, vary depending on the location, and some costs – such as housing and/or transportation – are things that are usually already paid for before the child even arrives. That being said, there’s little doubt your biggest expense will be child care (assuming both parents continue working) and that can run close to $1,000 a month in bigger cities like Los Angeles.

The bottom line: There are many other costs that can arise, and that’s why it’s difficult for parents to put a price on parenthood. Creating a plan, however, can help you manage new expenses and responsibilities.

Take advantage of this time before the baby arrives to help get things in order. If you and your spouse discuss and agree on certain expectations, goals, and strategies now, you can avoid financial problems later on down the road. After all, you don’t want your child to feel like they’re a burden in your life.

  • Make Room for Your Baby in Your Budget

The startup cost of having a child might be really steep, but don’t overlook the extra day-to-day costs your little bundle of joy will bring: Babysitters, clothes, diapers, food, health insurance, and of course, utility bills since you’ll spend more time at home.

As a rule of thumb, you should plan on spending at least an extra $200 a month for total expenses. If you find that you need to pay more for child care, a bigger home or a new vehicle, then you’ll need to budget more. It’s a good idea to examine your budget to help identify certain areas you can cut back on to make room for extra expenses.

  • Pay Off Debt

If you pay off your debt before the baby arrives, then the money you were spending on monthly payments can now be used for taking care your baby – not to mention that you’ll also be creating a stable financial environment. For instance, let’s pretend that you have a $3,000 balance on your credit card. That’s about 18 percent interest. If you’re paying the bare minimum ($60 a month), then it’ll take you about 36 years to pay it off and cost you close to $8,000 in high-interest rates. If you’re able to pay $300 a month, however, you’d have that debt paid off within a year and only pay about $275 in interest.

It’s also a good idea to see where else you’re spending your money and make getting out of debt your top priority. If you’re unable to pay off all your debt before the baby arrives, try to pay them down as much as possible. The sooner you start working on this, the easier things will be later on down the road. Once is the baby is born, continue to make smaller payments until your budget is stable enough for you to get back on your feet.

  • Let Your Boss Know

It makes sense for most parents to hold off on telling their bosses about their big announcement until after the first trimester when the risk of miscarriage goes down. However, you don’t want to wait until you’re showing to let your colleagues know.

Different circumstances, of course, may dictate a different strategy. For example, some women might experience different illnesses during their pregnancies stages, making it practically impossible to drive to work. Fortunately, if you have a supportive boss, they should be able to understand.

If for some reason you’re worried that your employer might not welcome the news, consider holding off your announcement until after a salary performance review. That way you can make sure that the news doesn’t influence how you’re treated. You can also make the announcement after completing a big project at work to show your boss and colleagues just how valuable you really are to the organization.

  • Start Shopping Around for Life Insurance

You probably didn’t feel the need for life insurance when you were single, or even as a couple; but now that you’re going to be a parent and have a family that relies on you for financial support, it’s a must.

When do you need life insurance?

Well, it all depends on the financial needs of you and your family. When evaluating your options take into consideration your financial obligations.

Generally speaking, you should buy enough coverage to equal anywhere from 8 to 12 times your income. If you’re the family’s main provider, stick to the higher end life insurance plan. The low figure might be only enough if both spouses are working full-time jobs. Even stay-at-home parents need their own budget plan for child care in case of an unexpected death in the family.

Even if you’re budgeting wisely and taking advantage of different savings plans, you’ve got a lot to plan for when it comes to your money and your kids. Don’t worry: being pregnant won’t influence the rates since the risk of dying in childbirth is much lower than it was a hundred years ago.

Most parents have no idea what they’re getting themselves into financially when they have children. If a baby arrived with a bill, you’d be worried too. Yes, the process is daunting; and yes, being a parent requires a lot of love, nurturing, and of course, money. If it’s done right, however, the experience can be the most rewarding thing you’ll ever face.

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Thank you for reading the article. What are some other ways parents can plan their budget accordingly when expecting a child? Don’t hesitate, leave a comment below.

Looking for Financial Security? Start an Emergency Fund

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Life planning involves making plans for your future, and financial planning is a major part of the process. Financial planning includes setting up investments, planning your retirement, and starting an emergency fund. An emergency fund gives you a safety net that provides a sense of financial security. At a minimum, an emergency fund should have enough money to cover six months’ of living expenses. Additionally, you should have extra cash saved for emergency events, such a car repair.

Unemployment

In 2016, the average time an individual remained unemployed after losing his or her job was 27.5 weeks, which is about six months. This is why financial experts recommend saving for six months’ of living expenses. Even if you were lucky enough to receive an offer from the first company to which you applied, the hiring process can sometimes take two or three months.

Consider that losing your job and needing to cover an unexpected repair, such as a broken dryer, is a possibility. Therefore, you should also have extra money saved on top of living expenses. While you could permanently lose your job and be forced to find a new one, you could also miss work short time or long term from an illness, injury, or disease.

Health

Saving for insurance premiums and medical services you may need in retirement or during a short period of unemployment is important, but these aren’t the only healthcare costs for which you should be planning. While an unexpected bout of strep throat won’t necessarily require you to dip into your emergency funds to cover a doctor’s visit and an antibiotic, there are illness, diseases, and unexpected injuries that can cause your finances to take a big hit.

Illnesses and infections, such pneumonia or appendicitis, often require hospitalization. The latter can require surgery, which will prolong your hospital stay, resulting in more missed days from work and a hospital bill that runs around $1,500. Some people suffer a severe injury or receive an unexpected diagnosis of a disease that requires long hospital stays, frequent doctor visits, and expensive testing. Even if you have insurance coverage, it can get costly. Never mind the fact that you’re missing work on top of it all.

Home

In addition to health care costs, home repairs and remodeling projects can also get costly. How much you should set aside for your home maintenance budget will depend on the value, size, age, and condition of your home, as well as where your house is located, the weather where you live, and type of property that you own. In general, try to have a sort of hybrid method of saving 1 percent of your home’s worth and $1 for every square foot you own. So a 1,500 square-foot home at $200,000 would need $1,750 annually. Also, add 10 percent to your savings total ($176 for the previous example) for each factor outside of size and costs (e.g., weather, condition, age, location, type).

The number you come up doesn’t represent the literal amount you’ll spend every year. Instead, it’s saying that over a span of 10 years or more, you’ll average this amount annually. Some years you’ll spend far less, and some years you’ll spend more. For example, you may spend $100 on paint one year, but the next year you may need a roof replacement, which can cost between $4,000 and $8,000.

Keep in mind that remodeling can add equity to your home. So while the cost of remodeling can get pricey, generally, the more expensive projects result in a bigger return. Take a kitchen remodel for example. The national average cost of remodeling a kitchen is near $19,000. However, it’s a remodel that can add equity to your home. In fact, it’s one of the highest return-on-investment (ROI) remodels with an ROI of nearly 83 percent.

Start Now

There are many other costs that can arise, such as car repairs, preparing for a baby, and becoming a caregiver for a loved one. It’s impossible to be prepared for everything, but not having any money saved away is a poor financial decision. Remember that you can’t save it all up overnight. Just put away what you can each month, and overtime, the money will grow. Whenever you receive extra cash, like for a gift or tax refund, put that money into your emergency fund savings account. When an emergency arises, you’ll be glad you did.