How To Start Financial Planning When You Start A Family

Guest Post by Sara Baily at The Widow Net

Financial planning is something all adults should be doing, but it is especially important for anyone starting a family.

After all, when you suddenly become responsible for the health and well-being of another human for the next couple of decades, it can easily put your financial decisions into perspective.

But don’t worry – planning your family’s finances doesn’t have to be complicated or overwhelming.


Your day-to-day budget is the foundation of your financial planning.

Without proper budgeting, you will struggle to set enough money aside for savings, and you may end up spending a lot more than you need to.

Today’s Parent recommends starting with an evaluation of where your money is currently going. Keep track of every purchase you make for 30 days, including the small things. At the end of the month, go over your numbers – where are you spending more than you realize? Where can you save?

Every family budget will be split differently, and there is not a strictly “correct” way to do it.

However, if you don’t know where to start you can use general guidelines at first, and adjust accordingly after a few months if you feel that they are not quite right for you.

If you are expecting a child, your current expenses are obviously going to change soon.

The USDA data on the cost of raising a child is a useful reference point for how much you will need to adjust your budget.


How much you can afford to spend in a month will depend on how much you need to save.

How much you need to save depends on a variety of factors.

Among others, you should be thinking about the following savings:

  • Emergency savings for any unexpected expenses or for a loss of income
  • A college fund to help pay for your children’s higher education when they grow up
  • Savings for holidays or special occasions like Christmas
  • Your own retirement and end-of-life fund (see below)


This may seem like a lot of money to save up, but remember that the earlier you start, the more time you have on your side.

There are several high-yield savings accounts available that will make your money work harder, so do your research and shop around.

Life Insurance

Now that you have dependents, it is absolutely essential that you have a safety net in case anything were to happen to you.

The good news is that chances are you are vastly overestimating how much this will cost you: in a 2015 survey, people between the ages of 18 and 35 overestimated the cost of life insurance by 213 percent.

Before purchasing life insurance, you should understand the different types of policies that are available to you, as well as how the cash values and premiums vary.

You should also know that it is possible to sell your life insurance later in life to free up cash for your retirement.

End-of-Life Planning

Your end-of-life costs will seem like the last thing on your mind when you are starting a family, but it is important to address them head-on.

Having a plan for these costs well in advance is one of the best ways to help your family when you grow older.

This includes saving or pre-paying for things like hospital bills and ongoing day-to-day care, but also your plans for your funeral.

While this is an unpleasant topic to discuss, it’s an important one.

When you prepay for your funeral, you can save your family money and strife during what will be a difficult time for them.

You have several options here from designating a joint savings account for funeral expenses to buying a pre-need insurance plan through a funeral home or purchasing a final expense insurance policy.

Overall, effective financial planning for a family is a matter of good organization.

Most parents can’t afford to not make the most out of their money, and careful budgeting, saving, and planning for the future is the best way to achieve this.

Need more information on Financial Planning? Check out my Blog Post 10 Stress Relief Tips for the Financially Strapped

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  1. Pingback: HOW MUCH LIFE INSURANCE DO I NEED? - It's Mothers Turn

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