Family Financial Planning

The decision to start a family brings with it great excitement and anticipation. But while children are a blessing, they are not cheap. The financial responsibilities that come with being a parent are considerable.

Families Have Many Expenses to Juggle

All families are faced with myriad expenses that can seem overwhelming at times. In addition to the costs associated with bringing up their children, parents must figure out how to pay other bills, save enough for their child’s college expenses and also fund their own retirement years.

When couples are young and building a life together, time is usually not a concern. Planning for the future often does not extend beyond next year’s vacation. Where do they want to be financially 10 or 20 years from now? No sweat, they say, there is plenty of time to figure it out.

In fact, the time for young couples to start doing some serious family financial planning is right now. Better yet, even before they have children. If they hope to achieve their financial goals and aspirations, both for their children and themselves, they need a roadmap to guide them along the way. And they also need a healthy dose of discipline to keep them from veering off the road.

Some Family Financial Planning Basics

There are many elements to consider when developing a comprehensive financial plan. Here are a few of the basics:

• Save, save, save: There is no magic percentage you should save each payday. Just be systematic and make it as much as you can. Even small amounts can add up quickly. Also, take advantage of savings options offered by employers, such as 401(k) plans.
• Develop a budget and stick to it: Creating a budget is fairly simple. Sticking to it takes discipline. Allow for expenses that must be paid each month – mortgage, car loan, insurance premiums, etc. – and include some extra money for non-essentials.
• Start a college savings plan: The cost of college is one of the largest expenses a family will face. Don’t wait on this one. Start early and take advantage of tax-deferred savings options such as 529 plans.
• Create a will: In addition to making sure your assets will pass on to your loved ones in a quick and tax-efficient manner, a will can stipulate who should care for your child if something happens to you.
• Buy life insurance: Help protect your family from the impact of premature death with a life insurance death benefit to help replace lost earnings.
• Don’t ignore retirement planning: Funding for retirement should be a high priority in every family financial plan. With the disappearance of traditional pensions and an uncertain future for Social Security, you’ll need to take the initiative in securing their retirement years. Consider taking advantage of tax-advantage vehicles like 401(k) plans and IRAs early in life.

Family financial planning can be complicated but you don’t have to do it all on your own. A financial advisor can help you put together a strategy to meet your family goals.

This information is written in connection with the promotion or marketing of the matter(s) addressed in this material. The information cannot be used or relied upon for the purpose of avoiding IRS penalties. These materials are not intended to provide tax, accounting or legal advice. As with all matters of a tax or legal nature, you should consult your own tax or legal counsel for advice.

"The Hartford" is The Hartford Financial Services Group, Inc. and its subsidiaries.

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