Family Financial Planning 101: Looking To The Future

As a responsible parent, it’s only right that you want to protect your children and plan for their financial future. You don’t want to give them everything on a plate and you want them to learn the value of money, but you also want to provide for their needs. This is a tricky balance to find sometimes. All too often other kids at school have the latest smartphone or tablet, and peer pressure dictates that your little darlings will want the same. By giving in and simply buying the latest and most advanced bit of technological kit for them, they learn very little about the value of money. You need to lead by example and show your offspring just how important it is to be prudent and wise with their cash.

By instilling a sense of financial acumen in your children in their youth, you can feel more certain that they will grow into more financially responsible and cautious adults. As a family, you want to go on vacations every summer, keep a roof over your kids’ heads, and put food on the table. Being economically astute is crucial. Take a look at how you can be financially prudent while looking to the future.

Work

If you are in full-time work, you can show your child the value of money. Whip out a paycheck and show the breakdown of your earnings. Look at how much your pay in tax, pension contributions, and other deductions. Kids find this sort of thing interesting and finding out how much their parents earn will be a bit of a coup for your little cherub. When you go shopping, allow them to check out the receipt and get a feel for the cost of simple groceries.

Think about the sort of work that you want to do for the next couple of decades or so. If you feel stuck in a rut, don’t slog away just because you feel like you need to earn a wage. Burying your head in the sand while you work for eight hours a day while enjoying little to no job satisfaction will eventually lead to burnout and affect your mental health. Instead, you need to consider moving roles. This doesn’t mean giving up your job and becoming unemployed while you look. You never have to do this. Keep your job and keep your eye out for different roles within the same industry sector.

Don’t be scared to approach your boss and chat to them about your plans. If you’ve been in the same role for a few years, it’s only natural that you might feel ready for the next rung on the career ladder. Your employer may be eager to fulfill your request for a promotion because you are such an asset. If they aren’t, at least you have broached the idea that you might be looking for employment elsewhere. Start making applications elsewhere and you can find that your job anxieties decrease. Seeking a promotion will allow you to feel more professionally fulfilled and could see you earning a better wage. This could help top up your savings or fund some projects that you have for your home.

When looking at the breakdown of your wage, try to save at least a fifth of it. If you can save more, this is great, but a fifth will enable your savings account to look healthy and remain buoyant. This enables you to have a decent financial cushion should a rainy day occur. The car breaking down, a leak in the roof of your home, or a boiler needing a service will require an immediate and large cash injection. It’s always comforting to know that you have the readies should you need them.

Property

If you are a seasoned renter and you want your family to live in their own little patch of bricks and mortar, you need to consider how you can get your foot on the housing ladder. Being a responsible borrower is crucial to get the most favorable home loan. If you are keeping your savings in check and you can put a ten per cent deposit on a home, then you can achieve a low interest rate on your mortgage. If the loan to value ratio you can achieve is even greater, then you can achieve an even more favorable rate. A twenty five or thirty per cent deposit means that you won’t need to borrow as much and your risk of slipping into negative equity will be less.

Think about the sort of property you want to buy. This will be dictated by the budget that you have. Don’t torture yourself by viewing dream homes that are well out of your price range. You may be tempted to stretch yourself and overspend on your home. This can result in you spending too much of your hard-earned cash on your home loan, leading to you cutting costs elsewhere. You don’t want an incredible dream home if this means that you cannot afford to save for the future.

Think about where you want to buy. You may be tempted by the ‘up and coming’ area. However, this area may have been described this way for a decade or more only for it to remain a relatively undesirable place to be. Instead, go for an area that is well-established, that has excellent transport links, good schools, low crime rates, and strong amenities. These are the areas that will outperform the market and allow you to build equity for the future within your bricks and mortar. Consider location over size and get your foot on the housing ladder. Remember, this doesn’t need to be your forever home – it is the springboard that will allow you to fund your dream family pad in the future.

Instructing a property lawyer can be a challenge as they have a reputation for being lackluster when trying to contact them. Go for a property lawyer that is local so you can pop into the office if needs be. Ensure that you check out feedback online and ask family and friends for their recommendations.

Future Planning

If you are thinking about retirement even though it is a bit of a way off, you are being financially prudent. While you can still run a 10k in record time and you hit the gym three times a week without fail, it won’t be this way forever. Everyone grows old and needs to consider their future financial planning. To ensure that your dependents are cared for, think about looking into Canadian will & estate planning. Having a specialist to guide you in these matters will ensure that your money and assets will go to the people you want. A will also ensures that your wishes are adhered to when you are gone. This is crucial to ensure that your kids’ interests are at the center of your future financial planning.

You also need to consider your own care requirements. While you feel fit and healthy at the moment, you will need to think about how your health may deteriorate in the future. If you have a long term ailment like diabetes or heart problems, this is even more vital. Everyone wants to live independently for as long as possible when they get older. If you do need care, you need to think about the options you may need to look into.

Live-in home help may be an option if you develop mobility issues. For dementia, you may need to think about the individual you need to put in charge of the decision making in the future. Think about this now and ask a trusted friend who will be able to make decisions on your behalf. This chat may sound very morbid and depressing. However, it’s key to have a plan for these issues before you reach your twilight years. You may have to siphon off some of your savings to pay for home help or residential care, so keep this in mind when planning your financial future.

By planning for your financial future now, you can ensure that your kids will be instilled with a sense of maturity when it comes to their money in the future. Too many kids get everything that they want if they ask for it. You need to make sure that your children know that anything that they want needs to be earned. This doesn’t mean that you are a super frugal mom or that you don’t give treats every so often. It just means that you won’t provide every single whim that they have that could end up being costly and a waste of money.

Think about getting a foot on the housing ladder, reconsider your job options, and actively show your kids how to be sensible with money. Work hard, enjoy family vacations, and set aside some cash for a rainy day. Follow this guide, and plan for your family’s future by taking action now to be more financially prudent.


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