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During your 20s, financial life planning always feels like something you’ll have to do in the future. However, as we get older, responsibilities such as children and mortgages mean we can’t afford to wing it and hope for the best anymore. Deciding to take control of your future finances is the first step, but what comes next? How do you figure out what contingencies to plan for, or what plans you need to put in place? We’re here to help.
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Children and Family
Whether you’re already a parent or are just starting to think about it, it’s important to think ahead when it comes to your family’s financial future. First, you need to consider the immediate costs, especially if you are about to start a family. Nerdwallet has found that most parents vastly underestimate the cost of a baby’s first year of life and found that it can add up to as much as $21,248. Is this something you can afford? If not, it may be a good idea to save up more money.
Then, you can start looking toward the future. The sooner you start saving for college, the better. This is thanks to the magic of compound interest: if you were to save for the first nine years of your child’s life and then stop, you would earn considerably more than if you saved between the ages of 9 and 18.
You should also have a plan to ensure your family will be okay in case you or your partner die unexpectedly. You’re never too young to start estate planning and to have your paperwork, such as a will, in order. A 30-year term life insurance may be a good choice, especially if you have recently married or have a 30-year mortgage.
Home and Mortgage
If you are looking to buy for the first time, you first need to make sure your finances are ready for a mortgage. It’s a good idea to start by getting a clear idea of your current expenses and paying off smaller debts. You may also want to consider a 15 or 20-year loan if you think you can sustain it, as it saves you money overall.
If you already have a mortgage, the best thing you can do is make sure you take good care of your investment. Have a schedule for regular home maintenance tasks and do not neglect them, no matter how new your house is.
You may feel like you're stuck in a rut with your career with no way out. Fortunately, the answer could be as easy as investing in your education by earning an MBA. The degree can lead to a salary increase, new career paths, and a financial peace of mind for your family. The degree doesn't have to take over your life if you're careful to select a program that offers ample flexibility, such as few to no assignment deadlines. You'll reignite your own passion for learning and set a great example for your family as well.
If you don’t have health insurance, get it. Not having any health insurance could be catastrophic for you and your family. If you do have health insurance, you may want to consider whether there are any supplemental plans you could benefit from. For instance, parents with growing children may want to invest in dental insurance to cover their orthodontic care.
Healthcare is an area where financial planning intersects with lifestyle since the best way to save money is to not get sick. While this is not always possible, the choices you make in terms of diet, exercise, sleep, and mental health will go a long way toward achieving this. Also, research has shown that just following your doctor’s recommendations for diet and medication can save you up to $2,000 a year alone.
Taking the step into financial planning is not as daunting as it seems. It’s all about a shift in perspective: instead of thinking of your life month-to-month, or even year-to-year, you need to start thinking about the next few decades. The time will pass before you know it, and you will be thankful for the work you put in. Do your research, stay organized, and save as much as you can. By simply doing this, you will already be doing yourself a favor in the years to come.
6/8/2022 03:30:15 pm
I like how you mentioned that it is important to take care of investments like your mortgage. If you are thinking of investing in the stock market, I would think that it would be a good idea to work with a financial planner. I would think that a financial planner would help you manage your bigger investments.
I totally agree when you said that we should also plan for our family to ensure that they will be fine if ever my partner or I am gone sooner. We have two children, one teenager and one is still a kid. At the age of 40, I think it would definitely be a good idea to talk to financial management services now to prepare our assets, properties, and savings for the security of our children if anything happens to us unexpectedly and they are still minors.
8/8/2022 08:00:08 am
It was most captivating when you mentioned that immediate costs must be prioritized if you’re already a parent. My friend is having a hard time planning his finances. I should advise him to hire a financial planner to guide him.
8/15/2022 11:09:25 am
I want to make sure that I'm able to retire one day. It makes sense that planning out my finances would be important. I could really benefit from working with a financial planner to ensure that I handle things correctly.
8/31/2022 07:11:15 pm
I appreciate you saying that you should think about the expenditures right now, especially if you are planning to start a family. Although my husband and I intend to start a family right away, we want the best for our children. I will talk to my husband about finding a financial planning coach to assist us in making financial plans for the future and for our children.
9/15/2022 09:16:36 pm
I love that you talked that investing in a financial plan could help you with your future plans. My best friend informed me the other night that he and his wife were planning to invest in a small clothing business, and he asked if I had any suggestions for planning financially. Thanks to this enlightening article, I'll be sure to advise him that they should seek the advice of a reputable financial planner that can provide more information about the process of financial planning.
11/25/2022 03:04:04 am
I appreciate your post. Your piece about guide to financial life planning was interesting to read. This content will be bookmarked for sure.
12/6/2022 06:25:52 pm
My cousin is thinking about getting married, but he is really worried that their opinions on money differ a lot. He would really like to make sure that they are on the same page and have a plan that can help them to be more successful. I think that they should meet with a professional that can guide them. I'll be sure to tell him that he should consider how much a baby costs, and understand that it may be as much as 21,148 for just the first year.
If you want to buy a home on a mortgage, then make sure your finances are ready for a mortgage
12/15/2022 03:28:56 pm
It's good to know that you should think ahead about your family's financial future. My older cousin was at my house last night for dinner, and he talked about how he wants to hire a financial planner who can help him make sure he is finically responsible. I'll pass these tips along to him so he can know some more financial planning tips!
1/5/2023 12:36:44 pm
It really helped when you described the importance of understanding your financial situation before starting a family. Recently, my wife and I started talking about having kids and buying a house for our family next year, but before we make any life-changing decisions, we'll follow your advice. Thank you for the tips on meeting with a financial professional to help us understand how much money we'll need to start a family.
1/11/2023 10:11:54 am
Thank you for sharing this piece. Very informative and timely. I believe that sharing info like this will likely educate others with regards to the value of investing and the proper way of executing it.
1/16/2023 10:33:54 am
It got me when you said that we are never too young to start with the estate planning paperwork such as creating wills and testaments. I should consider talking to an attorney specializing in this field to ensure that In will understand everything I need to create a useful legal plan for my future. Also, I want to already have an idea what I need to prepare once I get married someday and have kids as well, since I already got my own house and car.
2/15/2023 06:54:38 pm
I think you are right about offering ample flexibility within your policy. My policy needs to be expanded. We'll have to talk to an insurance agent to see our total options.
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