My Personal Finance Blog

Creating a family budget and implementing it is something that you and your spouse or partner should do together. It makes sense considering you are both using your family’s money. It’s even a good idea to get your kids involved in the budgeting as well. Get together as a family and talk about why your family must live on a sound budget and what financial planning is involved. Teach your children about the income and expenses data you fill out as you work your way through the financial process. Tell them about your current income and spending numbers, let them understand how much less money your family needs to spend each month, and ask your children for budgeting ideas, including expenses that they are willing to give up. Also, discuss with them any budget cuts you plan to enact that will affect them directly.

At the end of every month, get the family together and compare your budgeted spending to your actual spending. Have a small celebration if your family’s spending is in accord with the family budget by doing something inexpensive activities together – maybe go out for pizza or go to the park. When your data shows that your family spent more than was budgeted, discuss with your family why you went over budget and what each of you can do to ensure it doesn’t become routine.

When your kids feel like an important part of your family’s financial planning and understand that you value their suggestions, they will be more willing to work with you, not opposed to you. In addition, they’ll be less likely to resent changes that may affect their lifestyle. Not only will this improve your family’s finances, but it will teach your children some value lessons on budgeting and making wise decisions financially. You may even find it helps bring the family closer together.

Family financial planning is perhaps the most important part of the happiness of a family. One cannot have a happy family if one has to constantly worry about money. That’s why it is important that parents and parent-to-be understand how to plan their family finance in advance.

The term “family planning” often used interchangeably with the words “birth control”. Family planning involves the planning of the birth of your children at chosen times and the spacing of births a few years apart.

Having a good plan before marriage can save a family from lots of unexpected events. The couple will have time to focus on their work and their job and save enough money before having their first baby.

Having children less than 2 years apart or more than five years apart can affect the healthiness of the mother and the children. And by having too many small children the parents lose the ability to educate them to their fullest. The parents will not have time for each kid and some kids will feel neglected. As parents, we have the responsibility to provide food, clothing, education and shelter for our children. By having children at the right time, we are at our best to provide them what they need.

We can use many contraceptive methods to prevent unwanted pregnancies. Knowing and recognizing the importance of birth control is the first step to family finance. There are many organizations that will provide sexual education as well as free or inexpensive reproductive health care around the world so that even low income families have a chance to plan their family finance.

Family financial planning plays an important part in the success of any family. Before having your first child, you should plan well the resource your need to educate the child and any subsequent children to the best of your ability.

One of the benefits claimed for capitalism is that the investment market calls for transparency. That means all companies selling stocks through the various exchanges must disclose reasonably full details of their financial performance – at least enough to allow investors to make an informed decision on whether to buy or sell. If the information is deliberately incomplete or misleading in a real way, the company can be prosecuted. In ideal world, this must keep companies honest. In March 2010, the economists are still arguing about whether the recession is over. Some are passionately asserting that all the major economies will now start positive growth. Others are equally passionate in warning about double dip recession or stagnation. Whichever camp eventually proves right, one very interesting piece of news to come out of the companies selling life insurance is that their more conservative approach to investment has produced steady growth throughout the recession. When you think of all the companies selling their expertise for the management of investments or the exploitation of movements in value through the hedge funds, it is good to see traditional values of prudence paying off. The returns may have been relatively small, i.e. between 3 and 4%, but any investment manager showing a positive return during a recession is something of a superstar.

As indicated in an previous article, this does not mean you should immediately purchase a whole life insurance. Ignoring the significant commission payments that cause much of your first year’s premium to disappear, it needs careful financial planning to decide whether whole life or the allied universal life fits your needs. One of the claimed advantages of whole life policies is they represent compulsory saving for your retirement, i.e. the cash value can either be drawn down or used as collateral for a loan if an emergency arises.

But that is the purpose of the 401k accounts. Both represent tax-free ways of saving and investing for retirement. But the greater freedom to manage the 401k accounts and the absence of both upfront commissions and high management fees usually means the returns are higher. Do not be deceived by the short-term losses in your 401k accounts over the last two years. Taking the longer view, investments have shown steady growth over the last fifty years. In real terms, you can expect your 401k account to yield more than a whole life policy. Put another way, you should only buy a whole life or universal policy when you have the maximum invested in your 401k and other more tax efficient savings and investment plans.

This does not mean you should not buy life insurance. Making adequate provision for your family and other dependents is a wise move. But you should only buy whole life if you intend to keep the cash value untouched until all the other savings have been exhausted. Otherwise, you are not giving the investment element enough time to maximize the return. When you use this site and get life insurance quotes, take the time to work through your overall financial strategy. If a whole or universal life policy fits into your best possible plans, buy with confidence. Otherwise use the life insurance quotes to find policies to make the right level of financial provision for your dependents without having to rely on a large investment component. If in doubt, work through the figures with an independent insurance agent. Make sure you make the right decision.

One of the things we value is certainty and predictability. It would be good if everything stayed the same so that, once we have put everything in place, we could just lie back and let life pass us by. Unfortunately, life has a nasty habit of waking us up. If we are lucky, the plans we laid cover the emergency. If not, it’s a case of picking up the pieces, working through the problems and putting new plans in place for the next time. But then there are the problems that creep up on us without any fanfares to announce their arrival. One morning we wake up and, when we look around, we find things are not the same. Welcome to the phenomenon of inflation. This is where the prices of goods and services slowly rise over time. The purchasing power of our weekly or monthly paycheck drops. With some persuasion, our employers reluctantly increase the pay and make up the difference. The result is a steady erosion in the value of the dollar. What was a good sum twenty years ago becomes a pittance today. This represents a subtle threat. Unless you actually think about the adequacy of your insurance coverage, you just drift on paying the instalments. If the worst happens, your dependents then find out there is enough to cover the cost of the funeral and pay the family outgoings only for a month or so.

In a recent survey of financial preparedness, the answers show that about 60% of all adult Americans have coverage representing less than three times their net annual income. In many cases, this amount would not be enough to clear off the outstanding mortgage on the family home let alone provide a lump sum to tide people over until the loss of income can be recovered. But the detail of financial planning is about more than a simple formula. Some industry professionals recommend coverage representing not less than six or seven times the net annual income. But it’s always better to start with the estimated level of debts. We start with the mortgage and any other loans secured on the family home. Although these amounts should slowly fall during your lifetime, many people actually maintain or increase the amount borrowed. This may be to trade up in the quality of the home or to release some of the housing equity as cash. The first priority should be to ensure that the family’s occupation of the home will not be threatened. Now add in the unsecured debts in overdrafts and on credit and store cards. Then what are the longer term plans to pay for your children’s college education? The number of dependents and their needs change during your life so keeping the amount of coverage the same is always an option. But, in most cases, inflation-proofing is the better choice, particularly if the policy has a cash value. This gives you more personal security later in life.

Life insurance planning is all about monitoring the needs of your dependents and assessing how much will be required to replace your earning power. When you are starting off, always get the maximum number of life insurance quotes. It’s also a good idea to take independent professional advice on the strategies to apply over your lifetime to get the most value out of the policy you buy.