GUEST ARTICLE BY: SARA BAILEY
Providing for your child is one thing, but being able to support them financially and emotionally is an entirely different duty that requires a healthy work-life balance. With the rising cost of living impacting all aspects of our lives, finding a happy medium is difficult.
What if you could enhance you and your child’s life now and in the future without getting a second job or side gig? All it takes is a good financial plan, which will also set a good example for your children. Need some help? Here’s how to get started.
It’s Budgeting Time
Creating a budget is a necessary part of any good financial plan, as it will allow you to see where your money goes. At first, it’ll be shocking to see how much you spend each month, but you can easily remedy the problem by cutting back on any glaring monthly expenses. Sit down and figure out where your money is going each time you cash a check or receive a direct deposit. Get the current balances of any retirement or investment accounts you have as well, and make a list of all your income and valuable assets. Then, gather the balances of any debts to piece together a clear picture of your financial health.
You have to start somewhere, and knowing where you are at the beginning will be a great way to track your progress toward your long-term financial goals.
Goals are what will keep you motivated to carry out your financial plan, giving you the boost of energy necessary to finish those long afternoon hours at work. Articulating each of your goals is a great way to help you stay on track, according to Betterment. So, while saving for your child’s college is a common goal for parents, go ahead and think of others as well.
This will give you a better idea of what it’ll take on your end to make each goal happen. You can work the numbers to see how much you need to accomplish the first item, then so on. For example, if you live in an apartment or a smaller home, maybe another goal of yours is to purchase a home that will accommodate your growing family.
Investing in property will not only give you a home where you can raise your family, but it will also be a wonderful addition to your portfolio. Conduct some research to find out how much of a down payment you’ll need to save to buy a home. Many factors affect your required down payment, but it can be anywhere from 3 percent for an FHA loan to more than 20 percent for conventional loans. While it sounds great to put less than 20 percent down, you’ll be required to purchase mortgage insurance. If you can, weigh both options since private mortgage insurance will increase your monthly loan payment. Every little number eventually adds up, so explore options and become acquainted with your spreadsheet software. Then, take action.
With a starting point and a plan, the only place left to go is toward your first goal. It’s easy to discuss money and daydream about the future, but you have to make it a reality.
Pay off your debts one by one, open a college savings account, create an emergency fund, save as much as you can, and continue building your portfolio whenever possible. This is the way to a financially secure future for your entire family. Know that a financial plan and good decisions will leave a lasting impression on your child. You can eventually retire comfortably knowing future generations will be taken care of.