Financial security means something different for everyone, including those who have a family to protect, and achieving that can come in many different forms, whether it’s a stable job, your own business or being self-sufficient like the family in the ‘Captian Fantastic’ film.
Securing your family’s financial future isn’t always easy and that doesn’t mean having a huge load of money either.
Money Advice Service found through the Financial Capability Survey that 39% of adults don’t feel confident managing their money and 11.5 million have less than £100 in their savings so you are not alone here. There are so many things to take into consideration as money comes and goes.
Securing your family’s financial situation is a huge cornerstone of responsible parenthood and it’s something all families aspire to and strive for. It involved a proactive approach to budgeting, saving, insurance and investing. While, as mentioned before, it’s not a rule that fits all when assessing your situation, exploring the options and making decisions based on that exploration is very important.
First, you need to understand what options are available to you so here are some essential steps and solutions for you to harness financial security in your family life.
Assessing Your Financial Situation
While every family is different, taking the necessary steps forward is also different. The first step to creating a financial plan is to first assess your financial situation. This will come down to making note of all your outgoings from bills, savings, money for clothes and activities and so forth.
Having an established outlay of where all your money goes can help you figure out if there are any areas that you need to cut back on spending, whether it’s clothes or activities. This might be hard because changing spending habits is like changing your whole routine, which some people tend to struggle with but it’s a necessary step.
This can also help you establish your financial goals and come up with a game plan and timeline to achieve them. Creating a financial goal list for the short, mid and long term is a great way to not only visualise financial security for yourself but is also a constant reminder that you’ve got something important to work towards.
Debt is a huge thing that needs to be mentioned, as just over 8 million people will be in debt in 2023—a lot of people just within the UK. So you can imagine how those people feel and want to turn it around for their families. Get in place a repayment plan that allows you to chip away but also put money into other things like investing or saving. Here are some ways that you can establish financial security for yourself and your family.
Build Emergency Funds
Emergency funds are there in case of rainy days and can cover things that are not always foreseen but happen to a lot of people. This could include fixing a car or a broken phone. Things that are essential for the family to function smoothly and without putting any strain on your mental or financial health will come with emergency funds. This might only need to be a small payment plan you put in a separate account and place wherever you can afford each month. Be sure to keep any emergency funds in a liquid account for quick access.
Prioritising saving is a huge cultural thing, especially in the USA and America. It can especially be hard for some people who are not taught this from a young age, but it does alleviate so much pressure as the days, months and years move on. This is especially important for growing families, but especially for those who don’t have the luxury of free health care, schools and so forth.
Be sure to be strict with your spending. For example, if you overspend the month before, you will need to take that from your spending money rather than your savings, which I have been guilty of doing many times.
Protect Your Income
You and your partner must have a steady income and ideally, room to progress this will not only allow your financial goals to move forward but will enable you to maintain a financially secure life. So how exactly do you guarantee that your income is protected?
Looking for policies that protect your family during unexpected events, like life insurance or relevant life insurance, if your workplace can offer that as a business expense? In case anything unexpected were to happen, you can rest assured that your family has the funds to remain and build back up. The policies as a whole can cost as little as a cup of coffee and are an expense that shouldn’t be overlooked in anyone’s case.
Health insurance is another one, especially if you don’t live in a country with free health care. The cost of anything within the health industry is extremely expensive, to the point where families are spending all of their savings. Having insurance can take a huge fraction of those costs away but you can always have peace of mind knowing that if anything were to happen, you and all your family are covered and you can give them access to a wider range of treatments.
Final Thoughts
When it comes to protecting your family’s financial future and ensuring financial security, there are so many steps that need to be taken. It’s a slow and steady process and these little changes to your lifestyle and expenses will completely transform not only your family’s lifestyle but also your mental health for the better.
