A Parent’s Guide to Financial Planning by Sara Bailey

Whether you`re just starting a family, adding to it, or thinking about the future, it`s never too soon to set financial goals because they keep you focused on the end goals, help you measure and manage your progress, keep you on track and help identify adjustments to make.

Many financial planners will tell you that when you`re setting your goals and creating your plan, you should save for a rainy day or emergency, retirement and college expenses. Experts

also recommend including your kids in financial planning and encouraging them to set their own financial goals too.

Protect Your Family’s Financial Future

Don’t have a will? Get one. Use online programs or visit a local attorney to name your child(ren)’s guardian, set up financial plans and allocate the age for payouts, savings, and investment distributions. And if your employer offers a flexible spending account (FSA) to help cover the cost of childcare, take advantage of it. Most states allow you to use these pre-tax dollars to pay for up to $5,000 of childcare expenses.

You should also manage your debt by paying down credit cards and other high-interest debts, which tend to eat up funds faster than a savings or investment account can accrue interest.

Create a Budget

As you’re setting your financial goals, you should create a budget. You’ll want to know the value of your assets, which includes determining the value of your home — if you own one — as well as the amount of your debts. If you’ve never had a budget before, you may wonder whether it’s really worth the effort. Spoiler alert: It is.

A budget tracks your monthly spending on everything, from recurring bills like utilities, a mortgage, food, and gas to clothing, work lunches, and entertainment. Budgets help prioritize your spending and protect money you’ve already saved. Speaking of savings, budgets help you save more by building in transfers to your savings account each month. Budgeting puts you in control because you can monitor and check it daily, prioritize spending, and find places to trim unnecessary expenses. Budgeting doesn’t have to be a complicated process.

Saving for a Rainy Day

Most experts recommend establishing an emergency fund with enough cash to cover between three and six months’ worth of living expenses. If that sounds high, think about items currently in your budget that you could trim — like a cable bill, for example — if you were faced with unforeseen medical costs or issues with your home or cars.

Feel overwhelmed? Start small. Even $500 is a start. Create a change jar at home. Whenever you break a $20 and have a few singles, drop them in the jar, and when it fills up, make a deposit. If you don’t carry cash, use a mobile savings app that makes automatic transfers. Check out Qapital, Acorns, and Digit. When you’ve got money left over after paying bills, deposit some in your emergency account. Do the same thing with tax refunds. Have time for an extra gig? Use your second job to accumulate more money quickly.

You’ll want quick access, but keep the account separate from your regular checking account so you’re not tempted to dip into it. High-yield savings accounts, which are federally insured, are good options; they earn interest and can withdraw or transfer funds when necessary.

Benjamin Franklin was onto something when he said, “A penny saved is a penny earned.” When you cultivate an attitude that prioritizes savings and fiscal frugality — without becoming a Scrooge — you’ll provide solid financial footing for yourself and your family.

Our View

Sara has rightly noted key observations that any person should consider doing. She has realized the importance of having a proper financial plan in place after she lost her husband. We are really happy and pleased to see how Sara has stood up despite her loss and is taking the path of achieving financial freedom and also educating all people around her with the same values.