4 of the Best Financial Decisions You Can Make for Your Family

When you decide to start a family, a lot of responsibility accompanies it. You now have people whose wellbeing you’re responsible for, and in the midst of all of that, looking after yourself is equally important. One of the best ways to look after your family is by making financial decisions that will give them a brighter future. Although every decision you make probably won’t be right, you can increase your chances of making the right ones by acquiring the correct knowledge. There are some financial decisions that you can make that should ensure everyone is comfortable in the long term.

 

Creating a College Fund

If you have young kids, you will want to see them do better than you have in life. As you know, education can create so many more opportunities, so securing a college fund for them may be a wise idea. Instead of overwhelming yourself with the cost of fees and putting saving off, take it a day at a time. If you were to save as little as $100 a month, that would give you $1,200 a year which could be much more over the next ten years. Here are a few ways to save for their college fund below.

Savings account: Opening a savings account is one of the most ideal and safest ways to save for your kids’ college fund. It is an easy way of saving but be careful because a disadvantage is that it could reduce the amount of financial aid they get.

529 College Plans: You could also explore the option of 529 college plans if you like the idea of investing after-tax money into stock and bond funds. You could then withdraw the money tax-free for qualified education expenses.

Prepaid Tuition Plans: A third option to explore for your kids’ college fund is a prepaid tuition plan. This is only ideal if you’re sure that your kids will attend an in-state public university and it allows you to pay for tuition credits in advance.

Life Insurance

Another great financial decision you can make for your family is getting life insurance. This can spook people out if they feel doing so is a bad omen, but death is an investable reality everyone is going to have to face. What you don’t want is to have your kids burdened with financial difficulties if you leave earlier than anticipated. To avoid this, look into best term life insurance, so they have some financial support if the unexpected happens. The good thing is that you could choose to get it for a term of 5, 10, 20 or 30 years.

Emergency Fund

Rainy days are going to happen more often than you’d like, but they aren’t so bad if you’re well prepared for them. To protect your family’s wellbeing, always have an emergency fund stashed away that you can access in the case of financial downturns.

Doing so should serve as a security net in the case of unemployment, major fixes, or unforeseen medical expenses. To actually have enough in your emergency fund, you may need to learn to be more frugal and cut down on leisure expenses.

Investing

Warren Buffet himself advises that people invest in low-cost stocks and bonds, so this is an option to try. You could even buy stocks for under $10, but it’s advisable that you stick with industries you have knowledge on. Get a brokerage firm or financial advisor to give you advice in this regard. However, you want to know that when you retire, you have passive income and won’t be a financial burden to those around you.

Ultimately, you want to make financial decisions that benefit the entire family. Even though you may not be able to control the future, you can influence it by making the right choices.