New families face many challenges as time whizzes by. Before you realize it, the kids are grown, and you must consider expenses like health care, higher education, and wedding bills. Stay ahead of the curve of life’s major expenses and remain prepared by making financial plans now.
Start Your Emergency Fund
A credit card is not your best line of defense in the face of an emergency:
Cash is always king, and three to six months of expense can get you through temporary job loss or significant repairs without paying the additional cost of high-interest rates. Start by putting $500 in a savings account as soon as possible and progressively build from there as you accomplish other financial goals.
Find Cost-Saving Measures Around the Home
Look for ways to cut costs over the long term. Solar technology has advanced by light years and is much less expensive than before. If you’re settled in a home where you will remain for many years, investigate installing solar panels, which save money on your energy bill and protect the environment. You may even get a tax credit:
https://www.ecowatch.com/solar/incentives/federal-tax-credit for making the purchase
Panels typically come with a 15 to 25-year warranty, so repairs will not be a significant expense. The installation cost depends on the type of panels, the size of your system, and whether you are on or off the grid. You can check prices here:
Buy Life Insurance While Young
If one of the breadwinners becomes disabled or passes away, life insurance is the best deal for protecting the family. You can’t predict when an accident will happen, and term life insurance:
is remarkably inexpensive for young adults. Some people prefer whole life insurance for its guaranteed returns, but this vehicle offers less coverage.
Plan Your Estate
If you die or cannot communicate after an adverse event, estate planning ensures that your medical wishes are honored and your estate is distributed as you desire. Designate a power of attorney:
https://www.nolo.com/legal-encyclopedia/durable-financial-power-of-attorney-29936.html to make decisions for medical and financial decisions
Without a will or a trust, your property may have to go through probate, which can tie up assets for months. The courts will decide how to apportion your estate, and the inheritance could be subject to heavy taxes.
Begin Investing Early
Many experts agree that Social Security benefits:
will dry up when many of today’s young people reach retirement age. Even if you receive some benefits at that time, the pace of inflation and cost of living will render your reimbursement insufficient to cover your needs. Begin saving now for retirement in financial vehicles separate from your emergency fund. An adviser can help you determine which investments suit your situation best.
Track Expenses and Monitor Your Budget
Calculate your take-home pay and any potential areas for boosting your income. Spend a month or two reviewing your expenses. Ruthlessly determine which items are needs and which are simply wants. Make a plan to spend less:
and increase savings.
Determine what goals you have over the short-term and the long run. Craft a plan that assigns every dollar a landing spot. Remain flexible as time passes because you will find areas where you can eliminate unnecessary items while creating room for the family to have enough for recreation and vacations.
Slow and steady attention to your finances will land you in an enviable position as you age and retire. Don’t put off wise decisions, as you will gain exponential rewards from applying sound financial strategies now.