Becoming parents for the first time is an overwhelming experience and a special part of your family journey. Whether you’re a single mother or are entering parenthood alongside your loving partner, the responsibility of caring for a family can be terrifying. While pregnancy, giving birth, and the first couple of years of raising your baby will occupy most of your time and energy, at some point, you must plan for your family’s future.
A major part of creating a secure family life for you and your child is to be financially stable. Although money isn’t everything, financial stress can be a burden on your health, your family life, and your child’s opportunities. In the U.S., financial issues are the second highest cause of divorce and are the number one cause of stress in relationships. Financial problems are also closely linked to mental health issues. Those who are in debt are three times more likely to have mental health problems than those who aren’t. Anxiety and depression are among the most common mental health issues experienced by those in debt.
Most parents will agree, though, that the most important consideration in their lives is the well-being of their child or children. Raising them to be loving, kind, and strong members of society are the top priorities, but ensuring that they have every opportunity in life can cue affected by your financial stability. In the event that your child requires expensive treatment, medication, or equipment, it’s important to be in a position where you can support them.
If you’re prioritizing financial stability for the sake of your family, here are twelve great tips to help you along the way.
1.Create a financial plan
By creating a financial plan, you are laying a roadmap for financial prosperity. Not only does it set out your financial goals for the year, but it also outlines the steps required to achieve them. Your family’s financial plan doesn’t have to be complicated. The first action is to calculate how much income you expect to earn as a family. Use earnings from a previous year to help with an accurate estimation. If you’re still unsure, be conservative with your estimation to ensure safety.
Next, you must work out your annual expenses. Calculate this month-by-month if it makes things easier. It’s important to consider any larger expenses that you may incur, such as home maintenance, car repairs, or other significant purchases. Align your earnings and expenses with your financial goals for the year.
2. Follow a budget
After creating a financial plan, it’s important to act on it by making a family budget. Break income and expenditure into various categories and calculate your weekly and monthly budget. Track all of your earnings and outgoings and ensure that you are sticking to the plan. Following a budget can force you to shop around and be more conscious of your spending habits. This helps you to save money on your regular bills.
3. Allocate time to work on your finances
While many people put time into financial planning and budgeting in an attempt to create a positive future, too few of them stick to their plans in the long term. One of the main reasons for this is that they don’t allocate dedicated time to work on their finances. Incorporate financial planning and updates into your schedule as often as necessary. By adding it to your weekly task list, you hold yourself accountable for tending to your finances.
4. Analyze your lifestyle and spending habits
If becoming financially stable is the goal, you must look closely at your lifestyle and spending habits. If you are spending large chunks of your budget on unnecessary products or services, you may need to curb your habits. Adjusting your lifestyle is never easy, but setting goals, planning, and analyzing can help set you on the right path.
5. Have an emergency fund
If you don’t have an emergency fund already, one of your financial goals should be to have one. Unfortunately, a large number of families are unable to afford a financial emergency. Whether you lose your job, a family member has a medical emergency, or your house requires emergency repairs, it’s important to have the necessary funds to cover your expenses. While you may not be able to cover rent, mortgage, or large payments in the long-term, it’s important to have some rainy day cash. Put money aside every week until your emergency fund is adequately stocked.
6. Plan to clear your debts
A large number of families are in debt. When securing a suitable home, paying for baby equipment, and covering medical expenses as a young family, some debt might be necessary. In many cases, debt isn’t bad. However, you must have a plan to get rid of it, and it’s vital that you can always pay your bills.
Come up with a plan to clear your debts. This should be incorporated into your financial plan.
7. Be good communicators
If you are married or are in a relationship, it’s crucial for you and your partner to be good communicators. Being on the same page about your household finances is important for maintaining a healthy relationship and for sticking to your budget. Be open, transparent, and understanding when it comes to communicating about money. Dedicate time each week to discuss your financial state and progress.
8. Ignore status and focus on stability
Some people have different ways of perceiving financial health. Certain belongings or purchases represent status in society. While assets, belongings, and perceived lifestyle often reflect someone’s financial health accurately; other times, they don’t. Many people spend most of their time pretending to be more well off than they actually are. Such actions lead to financial trouble in the future.
Ignore status symbols and focus on stability. Make decisions that provide a stable environment for your family instead of spending money to impress other people. This doesn’t mean that you can’t buy nice things, but it suggests prioritizing more important purchases.
9. Consider investing
Investing can be an effective way of generating significant income in the long-term. While it requires some initial investment, it’s possible to turn a small sum into a much larger figure with a careful investment strategy.
Before starting an investment endeavor, it’s important to consider the risks. Set aside an amount of money that you can afford to lose and invest in shares, stocks, or property. It’s advisable to seek professional advice if you are inexperienced.
10. Hire a professional financial advisor
Hiring a professional financial advisor or employing an accountant to take care of your finances are great ways to relieve the burden of stress that’s related to managing your money. You can have peace of mind in the knowledge that your finances are being monitored by an expert. Finance professionals are more cost-effective than many people think.
11. Create a more sustainable household
As a global population, we are becoming more environmentally conscious. There are clear efforts being made by corporations and people to work and live in a more sustainable way. By creating a more sustainable household, you cut down on waste and focus on efficiency. This can lead to considerable savings on your utility bills. Consider switching to energy-efficient home appliances, as well as renewable energy sources.
12. Get a life insurance policy
Much like an emergency fund, you never want to have to trigger a life insurance policy. However, purchasing one is arguably one of the most important and responsible things you can do for your family. While your main focus should be ensuring financial stability for your family while you’re around, it’s important to prepare them for financial security if something tragic occurs. Purchase a life insurance policy and have a contingency plan for when you’re gone.