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4 Financial Moves All Young Families Should Make Today
Though your family may be young and thriving, there are four moves you should make today to build a strong financial future for your loved ones. From planning your final expenses to building an emergency savings fund, these smart financial moves will provide you and your loved ones with peace of mind as you navigate life’s obstacles and prepare for the unexpected. To learn more about these four essentials, read on.
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1. Create a Family Budget
Now that a portion of your income is going to things like life insurance, childcare, medical coverage for your family, and clothing, toys, and activities for your children, it’s time to create a household budget that takes these additional expenses into account. To begin, experts at Mint recommend using a budgeting method that’s easiest and most convenient for you — whether it’s a paper spreadsheet or electronic tool.
Once you’ve created your budget, you’ll need to work hard to stick to it each month. Look for strategies that help you stick to your budget and save more money over time. For instance, Frugal Momma’s offers printable coupons, and you can find promo codes and other online deals before you shop for groceries and household goods. With a bit of digging, you can save on food and beverages, skincare, health and wellness, and just about anything else you need to purchase for your young family.
2. Build an Emergency Fund
In addition to planning your funeral and creating a family budget, another financial move you’ll want to make early on includes the building of an emergency savings fund. As Lifehack explains, if something catastrophic happens, like you lose your job, cannot work due to an illness or disability, or need to make major repairs to your home or vehicle(s), this savings fund can help your family to get by without falling into debt.
As you get ready to build your fund in a high-yield savings account, money market account, or Certificate of Deposit (CD), you can use an Emergency Fund Calculator to set a savings goal for your household. However, keep in mind that most experts recommend saving enough money to cover three to six months of your family’s living expenses.
3. Hire a Financial Planner
Financial planning can be a challenge for young families, mainly because you’re dealing with so many life changes, growing responsibilities, and increasing expenses. However, an experienced financial planner can help you to create a strong financial plan for your young family and answer the questions you may have about purchasing a life or final expense insurance policy, creating a household budget, and building an emergency savings fund.
4. Plan and Pay for Your Funeral
When you’re young and raising a family, among the last things you’d want to think about are the deaths of you, your spouse, and your children. As a parent, however, one of your responsibilities is to provide for your family in as many ways as possible — even after you one day pass away. By planning your final arrangements and paying for them early on, you’ll protect your family from financial hardship in the event that you die prematurely — and you’ll help to reduce unnecessary distress during this painful time in the lives of your loved ones.
While your final expenses will depend on the funeral options you choose when you’re young and healthy, Fox Business explains that most arrangements cost over $6,000, plus $3,000 more for burial. However, a pre-paid funeral plan, final expense policy, or life insurance policy that covers death-related costs would provide your surviving family members with the financial coverage they need to give you the memorial service you’d want and deserve.
The Bottom Line
Financial planning may take the backseat when you’re busy raising kids and juggling family life with work, marriage, friendships, and other responsibilities, but the financial moves you make — or don’t make — will affect your household for many years to come. To prepare for unexpected expenses while building a financially stable future for your family, it’s important to make these four financial moves as early on as possible.
Need help with getting started on a budget?
Step one of financial planning is to implement a budget. If you are unsure of where to start, begin with this article – “How to Start and Stick to a Budget” Here’s a hint, you’ll need to track what you spend. The article contains a simple free budget planner to help you begin.