When you choose to settle down and start a family, you could meet challenges with three things: raising kids, earning enough to meet everyone’s needs and starting a new life together with your partner. If you just recently became a mom or a dad, you might think that the future is still a long way away.
Don’t take time for granted, though. If you are a young parent, you need to take steps to make the future of your kids an excellent one. After all, you only want the best for your children.
Here are a few tips to help you plan for a great future for your family:
1. Create an Emergency Fund
A report from MarketWatch revealed that almost 25 percent of people in the United States have no emergency savings. If you were to lose your job because of the pandemic, where are you going to get the money you need to pay the bills and feed your family?
Don’t allow life’s unwelcome surprises to throw you off guard and ruin the future of your family. Make sure that you set up an emergency fund. The rule of thumb is to save at least three to six months’ worth of your living costs.
You can compute your expenses by listing down the stuff you spend for a month. Remember to include annual expenses, such as taxes, insurance premiums and school tuition. Then, multiply the figure you’ve got to at least three months (the higher, the better). This is how much money you’ll need to save.
If you need help saving money for your emergency fund, consider coming up with an automated savings plan. Whether you’re putting a hundred dollars of your hard-earned money into an investment account or a few dollars a day into a glass jar, the simple act of saving automatically will allow you to meet your emergency fund goal.
2. Start a College Fund for Your Children
You want the best for your little ones, and this includes enrolling them in a good college or university that allows them to obtain the education they need to land a respectable job. College, however, is expensive. So, make sure you plan for this expense ahead of time.
First, check if your state is currently offering a college savings plan that provides preferential tax treatment. This can save you some money when you are paying for your child’s tuition. The other alternative is to put your hard-earned dollars into a savings account that offers a high interest rate.
3. Protect Your Hard-Earned Money with Insurance
Never let life’s uncertainties take away the money and other things you’ve worked so hard for in life. Make sure that you get the appropriate life insurance plan, so your family will get to enjoy the fruits of your labor. If you’re not sure which specific policy you should purchase, don’t hesitate to get in touch with an insurance sales representative.
4. Develop Your Income-Earning Skills
Whether you’re attending seminars, managing a project or volunteering, developing your skills will add value to your career. When you can demonstrate mastery of your skills, you could use it to get promoted at work or earn a raise.
Alternatively, you could hone your skills to create new streams of income. If you like to bake, for instance, you could take up online courses to improve your baking and cooking skills. Once you’ve improved these skills, you can whip up delicious desserts and treats that you can sell for a great price.
5. Diversify Your Investments
When investing your money: “Don’t place your eggs in a single basket.” Place your dollars in different funds from different sectors and companies. This way, you don’t run the risk of losing your funds when one of your investments hits a snag. By diversifying, the money you’re planning to grow for the future needs of your family is secure.
6. Save for Your Retirement
You want to provide for your kids in every way that you can. Part of this is to make sure that you can sufficiently provide for your future self. This way, your children won’t have to worry about running out of money during your golden years.
When saving for your retirement, don’t completely rely on social security, as this can only replace a portion of your income when you retire. Instead, open a retirement account as soon as you have figured out how much money you need to save to retire comfortably. Reach out to a financial adviser to determine what account is best for your situation.
The future you create for yourself will ultimately affect your family. By saving and planning carefully, you can make sure that your kids have a great start in life along with a secure and happy financial future.