4 Financial planning tips for parents
Family Day has now passed, but that doesn’t mean it’s too late to take some steps to help improve your family’s financial well-being, using these four financial planning ideas for parents.
#1 This first tip is the most important: get a financial adviser.
Even if you do understand investing in markets, and enjoy steering your investments on your own, you don’t have an objective view of your budget, your lifestyle or what your feasible goals should be. A financial adviser can work with you, and your partner, to map out your family’s best path – they’ve worked with hundreds of people like you before, so you can benefit from their successes and the experience they’ve gained over the years.
#2 Give them financial freedom
Saving for your children’s education, a home that they are comfortable and secure in, and giving them life experiences like travel are undoubtedly important for you. But saving for your own future is even more valuable for your kids – if you are financially secure you will not be a burden on them in later life. So while you’re putting funds away for their education, also stash some away for retirement. It starts with a household budget –make saving a priority; work backwards and see where you can tighten your belt.
#3 Regularly evaluate and realign your plan
That unplanned, but adored, baby number three? Your partner’s choice to give up the nine-to-five and start his or her own business? An unexpected promotion or reorganization at work? Things change and your financial planner needs to adjust your investment plan accordingly. While sticking to a consistent investment plan will reap you the best rewards over time, tweaks can be made along the way to accommodate your life changes.
#4 Teach your kids about budgeting
You want to equip your children with all the life skills they need to make positive choices as they head off into the world. Money? You need to teach them that open, constructive discussions about cash are healthy. While you don’t want to fuel anxiety by telling them you are swamped in debt, you can explain that you are saving to fix the house, or to make your business bigger, and that means some of the treats they are used to will have to hold off for a while. A report by researchers at the University of Cambridge commissioned by the United Kingdom’s Money Advice Service revealed that kids’ money habits are formed by age seven – so you can start having these chats from as young as three.
Prudential has a range of unit trusts that help you grow your savings for the benefit of both you and your children. We also have tools to help determine how much you need to put away. For more information, contact your financial adviser or our Client Services Team on 0860 105 775 or at email@example.com.