The finance of starting a family
Ideally, you should start thinking about the financial side of starting a family before you even get into that serious relationship that could turn into marriage:
- Do you plan on being a big breadwinner in your household or would you rather focus on taking care of the kids while your spouse brings in the income?
- How many kids do you want to have and do you want them to earn their own way in life or will you provide support, and how much?
- When your parents get older, would you want them to live with you or would you at least want to provide some kind of support for them?
Of course, it’s also important to have your own financial world in order, so you’re ready to have a good conversation about money when marriage comes on the table. At that point, you need to have an honest talk about merging finances with your partner. Keep in mind, the more open and honest you are and the more you talk, the less likely you are to have problems down the road.
Making sure your bank account is ready for kids
A common mistake many households make with money is not planning ahead enough when you add another person. Babies are expensive and so are kids. We have an infographic that breaks down the cost of raising one child to get them out in the world and the numbers are staggering –about a quarter of a million dollars, does not even include a college education.
So if you’re planning on having children, start saving as soon as possible, and remember –when it comes to kids, you can never save enough. Once you have kids, then you need to start setting aside money for college, such as a 529 college savings plan. And, to help them get ahead later in life, you can do with things like treasury bonds and trust funds.
Include your kids in the conversation
You also want to start introducing your kids to finance as early as possible. Many adults struggle with money because their parents “protected” them from hearing anything about the household’s finances when they were kids. By keeping your kids out of all household money talks, they never learn –neither the value of a dollar, nor how to manage those dollars to be successful.
Of course, this doesn’t mean you should fight about money in front of your kids or make them feel bad for wanting something. Instead, you need to introduce your kids to how finance works and let them know that most things in life aren’t free so somebody always ends up paying. By teaching your kids early, you set them up for success and avoid problems in your own family finances.
More topics to help you navigate family finance
The information above just provides some basic guidelines you can use to get started on the right path in the world of family finance. The following pages go into more detail about specific topics that offer unique challenges when it comes to money management for your household.
- Money-Saving Tips for Families. These five tips can help you save money as a family. Build a household budget and teach your kids about personal finance at the same time.
- Back to School Planning. We help you create a back to school budget and shopping strategy that will help you save money and avoid problems with credit card debt that can arise during the second most expensive shopping season of the year.
- Transitioning Teens to Financial Success. A big part of your job as a parent is ensuring your children are prepared for adulthood once they leave the nest. This section helps you make sure your teens are ready to achieve financial independence.
- Tips for Loans to Family Members. Loans between family members can be a big source of tension and conflict unless they’re done correctly. Here’s what you need to know about loaning money to family, with tips on how to do it the right way.
- Finance for Boomerang Families. When adult children move back into your home, it can present some unique financial challenges for everyone. We help you meet the challenges created in a boomerang family situation so everyone can thrive.
