Starting a family is an incredible feeling quite unlike any other in the world. While this is an incredibly exciting time, it can also be daunting and this is for a few reasons. One of the biggest concerns that young families have is money and this is why it is so important to have a financial plan in place.
How Life Changes Immediately
Life changes when you start a family and in more ways than one. You will notice that your financial situation changes and this can be quite a shock to the system, especially those that have enjoyed the double income no kids lifestyle. When you have a baby, obviously you will have many new costs that need to be covered and these can quickly add up. On top of this, you are likely to have a dip in household income as a result of maternity/paternity leave or permanently quitting a job.
In addition to the above immediate changes to your financial situation, you must also think about the short and long-term future. The cost of childcare is an enormous cost to cover for parents that want to go back to work and you will then have to consider the increased costs as the child gets older and saving for their education. As if this was not enough, you then have your own financial situation to think about including mortgage/rent payments, the increased cost of living and your retirement.
The Importance of a Financial Plan
It is easy to panic when you factor in all of the above, but a strong financial plan can put you in control and help you to make the most of now while also building for the future. It is a smart idea for new parents/those starting a family to speak to a financial planning specialist that will be able to create a financial plan for your family based on your situation, needs and goals.
What a Financial Plan Consists of
This financial plan can cover all important aspects, including reducing spending, increasing income, saving for education, growing the family, helping your child to get onto the property ladder, retirement and even inheritance. Having a long term financial plan like this is important for helping to keep you on track while also greatly reducing the stress that can be involved with money when starting a family.
Life can feel very chaotic and expensive when you start a family. There is a lot to think about in the short and long term, but smart financial planning will help you to manage and build a comfortable lifestyle for your family.