Your financial plan should involve the dreams, goals and resources of yourself and your family. The success of any financial plan is dependent on the support, persistence, and dedication of all people involved. Without the participation of the household, you’ll face a continual uphill battle when it comes to your finances.
Having a plan for how to manage your money will help you and your family save money and avoid getting into longterm “bad” debt and ensure you build your wealth. It can also help you get on with being a family, rather than spending too much time on financial stresses.
A crucial part of any plan involves risk management. Without adequate planning for all possible eventualities, your future plans and dreams can go up in smoke.
Working out how much money you need for everyday essentials like food, housing, utilities such as gas, electricity, phone and water, transport and medical services also helps you plan for unexpected expenses.
After you’ve accounted for the essentials, hopefully there is some money left over to buy some of the things you want, as well as to save for emergencies and your long-term goals.
The key is knowing how much ‘spare’ money you have, and only spending that.
Family Planning Essentials
- Protect your income as all plans rely on your ability to earn.
- Consider life, TPD and trauma insuarance to ensure that if you pass away or cannot work due to sickness or injury, there is something for your family. Avoid being forced to sell the family home.
- Hold back a lump sum in times of urgency.
- What are your goals? Give yourself plenty of time – saving can take longer than you think so don’t put yourself under pressure. The power of compound returns can make all the difference.
- Keeping a simple savings plan will help you achieve your goals.
- Review the pros and cons so you know what you’re getting into with your savings plan and how it will affect your life.
Speak to us if you would like more advice. There might be other options that would help you, such as asking your employer to split your paycheck and put some of it into a separate low-cost, low-activity savings account.