It goes without saying that when you start a family, there are bound to be some family financial goals that you will want to achieve. These goals require a team effort and typically include considerations for both individuals at the helm and any children old enough to have aspirations. Goals are important as they provide direction and can be pursued in stages. I didn’t always feel this way. One story my husband like to remind me of is how earlier on when we just started dating, he wanted to make a five year plan, that I shied out of.
Why set Family Financial Goals?
Big goals tend to have big price tags. So now, ten years later, I try to plan out any and everything I can for our family. I believe failure to plan is planning to fail. Sure, life is unpredictable and requires a change in direction and approach ever so often, but the big goals typically remain unchanged. Our ability to pursue and tick them off our list makes up half the journey of life. Just because you can adapt doesn’t mean you can’t cushion the risk.
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As with vision board goals, my recommendation in that your family goals should also be in stages and SMART (Smart, Measurable, Achievable, Realistic and Timely.)
9 Family Financial Goals to Set
Here’s a list of big ticket items that can form the backbone of the family’s financial plan.
1. Buying Real Estate
Purchasing real estate is one of the more common goals that couples set for their families. In fact, some couple will even decide to purchase property before marriage or before having children. It is the one piece of asset that offer families security, as well as;
- Appreciates (in value) over the years under normal circumstances,
- Can be passed on to the next generation and will
- Usually be the most expensive.
This last point is what makes it something you need to plan for so meticulously. Real estate isn’t cheap. In setting the goal to purchase property, you will want to consider (as a family) factors such as geographic locations of interest, community, important surrounding environment, and the big one what you can realistically afford.
That last point is extremely important. What you want and what you can afford don’t always line up. If you’re like me and on’t own property yet but fully intent to, you browse the market periodically and stay abreast with economic and political influences, so you are on top what you want vs what you can afford and plan how to bridge the gap.
2. Family Planning
We typically talk of family planning in terms of birth control and deciding how many children the family will have. However, anyone who has has children know that as precious as they are, represent a serious financial undertaking (and other variant physical, mental and emotional investments too, of course). The mental and financial demands of having children are usually headliners.
The costs will begin rolling literally the minute you become aware of a pregnancy and will continue for a good two-decade stretch. From postnatal care, everyday maintenance, hospital fees, schooling, lifestyle and interests and healthcare, all of it costs money. Plus, we know that anything can happen so it’s better to be prepared.
One thing my husband and I forgot to discuss before getting pregnant with out daughter is childcare. If one partner is going to be a primary caregiver, then the family must be positioned to facilitate that. So it only make sense that family planning is considered when doing financial planning.
3. Children’s Education
Another big ticket item, is the children’s college education. Every family doesn’t have children, but for those that do, we know for a fact that college education can be expensive. As a millennial who had to fumble my way through paying for college on my own and having it take me several years, definitely do not want my daughter to have to go through that. I personally want the expense to be mine if she does decide to get a college education. Even if the child decided not to go the traditional career route, the money can be use to give them a good start.
4. Career Investments
Not everyone is fortunate enough to have achieved all their career goals before they start a family. In fact, for some the investment into advanced degrees and any other expensive investments are preferred to run concurrently with their family life, simply because the investment can take decades. What I’m saying too, college is expensive no matter who is going, and sometimes that means one spouse or the other or both will cost money. Lots of it.
It doesn’t have to be degrees though. Career investment could take the form of starting a business. Doing that can require a re-structure of the family’s budget and/or affect its financial standing. A business is a risk and certainly on that will affect a family centric individual if it goes awry.
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5. Debt Elimination
Debt servicing is a reality of life, so it’s not uncommon to have one or both partners who are coming to the family unit with debt. Whether it be student loans, car or mortgage payments or debt arising from bad money management or a lack thereof, it’s from the family coffers. Once debt is eliminated, resources can be reallocated as necessary to other goals.
6. Family Vacations and Travel
Some families take yearly vacations for a week or two to the Caribbean. Others value travel and want to take month long, country/continent hopping trips every few years or take once in lifetime trips. Either way, you want to make those goals clear and plan to finance them accordingly. Obviously, if your family is bigger, it will cost more and maybe you aren’t able to afford these trips as frequently as you would like, or you need to put things in place with your finances to ensure you can afford the schedule you want
7. Relocation/Big Moves
Big moves often mean big bucks. Especially if you are uprooting the family to a new city, state or even country. It can take time to network, find a job, start a business, etc. Usually, that requires some savings to tide the family over until you get back into the swing of thing.
This is especially true if you are moving from an area with a low cost of living to one with a high COL.
8. Emergency Fund/Nest Egg
Life is promised to no man. Anything can happen. Proof of that is the fact that we are currently living through a pandemic which did what most of us would have thought impossible. Tt brought most countries and globalisation to a halt for days and weeks on end. People have lost their jobs, plans put on hold, incurred healthcare bills longer than the amazon.
The fact is, things happen./ As a family you want to prepare a nest egg to weather unexpected storms. Most financial planning professionals suggest six months worth of living expenses, but given what has happened in 2020 and 2021, I feel like a year is more appropriate. That’s nit easy money to come by
And the Big R. Most people dream of early retirement, but aren’t able to finance their lifestyle if they aren’t working. This means that retirement planning should be included in your goals. If you are parent, what will you do when the kids move out? Will you retire then? Before?
Some people may want to travel in retirement, or downsize the house, or relocate to a warmer, more economic city to make the dollars last longer. Some people invest in real estate so as to have an income or a sizeable investment portfolio that will support them.
Whatever the aspirations, make the goal into a plan.
How to Pursue Your Family Financial Goals
Goals are nothing by themselves. After you have set the goals, you need to do the work. Once you’ve determine what’s important to you and your tribe, there are a few ways to action these goals. you can do that by;
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- Creating a family Budget and sticking to it as much as possible.
- Try to limit or plan forLifestyle Inflation (Increasing expenses with increased income)
- Save and invest for the long term.
What are some family financial goals that you were intentional about setting? Comment and share below!
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