Family Financial Planning: Your Go-To Guide

Every family is unique, but it's important to prioritize family financial planning so you'll be prepared for unexpected events. Explore 6 key steps.


Every family is unique, from your favorite birthday restaurant or road trip destination right down to your financial goals. However, one constant holds true for all families: it’s important to have a handle on your finances, and at a basic level, develop a contingency plan so you’ll be prepared when unexpected events arise. Proactive family financial planning can help you stay on track to reach your objectives, even if you incur a major expense or the breadwinner in your family suddenly needs to take time off work.

In this family financial planning guide, we’ll explore how to plan for the future financially and dig into six key steps to follow.

Family Financial Planning: 6 Essential Steps

Step 1: Tackle Your Short-Term Needs

Open communication around your immediate priorities is crucial in this first phase of family financial planning. If you’ve never created a financial plan, start by gaining insight into where your financial security may be at risk and setting up an emergency fund with enough money to cover a few months of rent or mortgage payments, if necessary.

Your next step should be to eliminate any short-term debt, such as credit card debt. You don’t want your hard-earned money going toward high credit card interest payments when you could be investing extra cash in the stock market.

Step 2: Set Medium- To Long-Term Goals

This part of the process will depend on your stage in life. If your main objective is to buy your first home, consider how much money you can save for a down payment, the interest rate you can secure on your mortgage, and any other hidden costs you may need to cover in addition to your mortgage payment, such as the cost of property tax, insurance, and repairs. don’t buy into the mentality that you’re throwing money away if you’re renting a home. You should only buy real estate if your budget allows.

If you have children, it’s reasonable to want to give them the best possible head start in life. However, this desire shouldn’t come at the expense of your present-day financial wellbeing. If your child is a teenager, talk with them about their college plans, and make sure you can afford to send them, or look into financial assistance – explain how student loans work. don’t dig a financial hole to fund a $40,000/year out-of-state education simply because your child wants to attend college with their friends.

Insurance also becomes increasingly important if you’re a parent, the breadwinner in your family, or both. Think about how you’ll replace your income if you’re no longer able to work and whether you need life and/or disability insurance.

Finally, if you’re closer to retirement, decide when you’d like to retire and how you can make it happen within your desired timeline. At this point in your life, you should also have at least a basic estate plan for contingency purposes (more on that later).

Pro Tip: Knowing how to plan for the future financially involves setting small, achievable goals. Trying to map everything out at once can be overwhelming and impede your progress.

Step 3: Establish A Budget

No guide to family finance would be complete without this aspect. If you have a hard time sticking to a budget, you’re not alone. However, if you’re struggling financially or trying to cross a big goal off your bucket list, it’s crucial to nail down a detailed budget and follow it as closely as possible. Here’s how to get started:

  • Find out the amount of take-home pay you earn on each check.
  • Review your company benefits (if applicable). Many Americans don’t take advantage of benefits like insurance plans and other health perks. If you inquire, you may find your company offers $50/month for a gym membership for example.
  • Track your overall spending. You should know whether your bank account is growing or shrinking each month, on average. In the latter case, you may identify a spending issue that you need to address. You’ll often be surprised where you spend large amounts of money if you track your expenses well.

Step 4: Review Your Plan To Keep Yourself Accountable

Look at your family’s budget and financial plan regularly to stay accountable and on track toward your objectives. We’re all busy, and it’s safe to say budgeting and family financial planning aren’t the first items on anyone’s to-do list. So, pick a time on your calendar and commit to getting this work done, then enjoy the fruits of your labor.

Use the time spent reviewing your finances as an opportunity to educate your children on basic financial literacy and involve them in the planning process, provided they’re old enough. This will make the family financial planning experience smoother and more effective for everyone involved.

Step 5: Consider Other Financial Opportunities

Once you’ve covered your family’s basic needs, including setting up an emergency fund and eliminating short-term debt, it’s time to make plans to remain financially and professionally stable in the future. This applies to young families, as well as those approaching retirement.

When you know how much money you have left every month after you pay your expenses, you may discover extra cash on hand. Determine where you can put this money to work for you and how much is available to invest whether it’s in your 401(k) at work or a small Roth IRA.

If your family has a big purchase planned for next year, such as a new home or car, your best bet is to save your money in a traditional bank account so you can access it quickly and easily without tax implications. You don’t want $100,000 tied up in the stock market if you need it for a down payment in short order.

Step 6: Create A Legacy Plan

The first step in this stage of the family financial planning process is to figure out whether any money will be left in your estate after you pass away. Communication is essential in this phase; you need to provide your heirs with at least a rough picture of your finances so they can carry out your wishes upon your death.

Next, you must ensure your assets will transition to your heirs as smoothly as possible. Make a plan for how you will distribute those assets, whether through estate documents such as wills and trusts or beneficiary designations like retirement accounts and life insurance policies. This pre-planning will help avoid complications around estate tax and income tax.

If you own a business, draw up a plan to pass it down to your children, but be sure to talk with them first to confirm whether they want to take it over. They may need business coaching, or you may have to sort out another kind of exit plan. You should have this plan ready as if you were going to sell the business next year.

How Curio Wealth Helps With Family Financial Planning

Involving a financial advisor in your family financial planning journey can help you prioritize your goals and assign each dollar you earn to the right type of account, where your wealth can grow as quickly as possible with minimum tax implications.

At Curio Wealth, we take the burden of planning off your plate and serve as your guide to family finance. We’ll get to know your family and what matters to you so we can create and coordinate a financial plan that fits your life. We’ll also identify any gaps and risks that could prevent you from reaching your objectives. Schedule a call with us today to take the step toward your family’s financial future.

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