Parents make many important decisions to help launch their family on firm financial footing for the years ahead. From choices about budgeting, saving for education or retirement, and understanding the cash value of life insurance, here are some suggestions to help parents make those important decisions for their family’s financial future.
Establish a monthly budget
When it comes to money matters, many parents will likely say that budgeting, whether on paper or a spreadsheet, is at the top of their list. By crafting (and sticking to) a budget that includes regular monthly expenses like rent or a mortgage, grocery shopping, and even home upkeep and repairs, parents can stay up to date on their expenses and set aside funds for everything their family needs.
Consider childcare options
Parents may also need to prioritize childcare options depending on their children’s age. While this will look different for every family, parents may find it helpful to discuss the financial details of their childcare needs to ensure they align with their current and future financial goals. This may include pricing regular childcare (including a babysitter or nanny), part-time daycare, or preschool or one parent deciding to stay home during those years in their child’s life.
Plan for education
Making an education plan is another important piece of long-term financial planning for parents. Parents should talk through the pros and cons of each option, including:
- Whether to send their kids to public, private school, or home school
- Mapping out long-term college planning
- Setting up a college savings account
Parents can ensure their children’s education aligns with their values and financial plan by having these conversations early and revisiting them as their children grow.
Think about financial protection
While every family’s needs will vary, financial protection is equally important for them to discuss. Parents can examine options like term vs permanent life insurance and sort out any other questions with a qualified financial advisor.
Pass down healthy money habits
By demonstrating thoughtful money habits like budgeting, education planning, and savings, parents can help their children share those same values as they age. Parents can start sharing healthy habits with simple actions, like:
- Giving them an allowance
- Creating small savings goals together
- Introducing children to budgeting early
- Teaching them the value of work with small chores around the house
- Explaining credit and debt to them when they get older
Be inclusive about future plans
When the kids are old enough, parents may find it beneficial to include them in familial financial discussions (within reason and to each family’s preferences). Some ways to include children can be:
- Openly discussing the details of family vacations and vacation budgets
- Planning for everyday activities as a family
- Getting the kids involved with meal planning and grocery shopping
- Involve kids in “big purchase” discussions like a new TV or family computer
Making these financial decisions can help parents provide a sense of security and peace of mind for their family’s future in every stage of their children’s lives.
Northwestern Mutual is the marketing name for The Northwestern Mutual Life Insurance Company (NM) and its subsidiaries in Milwaukee, WI.
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Source: Northwestern Mutual
Contact: Don Klein, 1-800-323-7033