Planning your family’s financial future

Raising a family in the current global economy is as costly as it is rewarding. But careful financial planning could make it simpler and help to ensure that money doesn’t become a worrying concern for you and your family. 

Developing a financial plan could help with setting key milestones and building wealth. It could make it easier for you to plan effectively for each of your children, from when they are born to when they leave home, and beyond. Typically, young families have several key goals and milestones, like buying a property, upgrading to a larger car, maintaining and renovating their home, going on family holidays, and paying for post-graduate studies.

You also may be at that stage of your life when you have debt as a result of home and vehicle loans, and because you have a growing family with financial needs. You are also more likely to have a lower appetite for risk. All these factors point to the necessity for sound financial planning.

Setting a budget

A budget can assist you to work towards your wealth-building goals while taking care of the needs of your family. By allowing you to understand your household cash flow, it will help you to keep track of your income and expenses, stay on top of monthly bills, set aside money for unexpected expenses, and avoid overspending. 

Setting a budget also gives you and your family the opportunity to define your values and to set financial goals in line with them. Critically, a sound budget will enable you to work out how much you need to save to meet your short and longer term financial goals.

Planning with your spouse

When couples share finances, they often need to take several financial considerations into account, such as managing bank accounts, agreeing on spending, buying property, planning for children, planning for retirement, and legacy planning.

Educating your children

The cost of education continues to outpace inflation. An education plan helps to ensure your children get the best education possible despite rising costs, so that you can give them the best opportunities in life. Beyond schooling and tertiary education you may want to consider planning for your children to study overseas too. Investing in a savings vehicle that provides capital returns will help you take care of these expenses.

Setting up a family trust 

A family trust will enable you to protect your legacy for future generations. It allows you to transfer your assets to the trust. People often establish a living trust for estate planning purposes. This means the value of the donor’s estate at their death is significantly less, and so is estate duty liability. 

The assets in a trust are protected from creditors. A trust also protects the interests of the surviving spouse and children, and it can continue for future generations.

Estate planning

In the event of your incapacitation or death, estate planning will ensure that your assets are distributed to your heirs, and that estate taxes are settled. Your assets may include local and offshore property, stocks, art, life insurance, and pensions. Planning your estate preserves family wealth, providing for the surviving family members. 

Retirement planning

A comfortable retirement depends on your financial resources. A key part of any financial plan is retirement planning, which determines your retirement income needs, and the actions and decisions necessary to achieve them. Retirement planning includes identifying sources of income, estimating expenses, implementing a savings program and managing assets.