Has your Family just got bigger? Here are the things you must do now for a better future

The arrival of a child in any family brings joy and great responsibility. While your income remains the same, the headcount increases. Moreover, considering the increasing inflation, covering child-raising costs and securing your future from a single income becomes challenging.

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Therefore, a big family needs careful planning and budgeting to secure its financial future. According to your goals and budget, you can set priorities and put a plan into action. Meanwhile, starting early and small can translate into big savings in the long run. This article lists a few tried and tested tips for big families to secure their future.

5 things big families should do for a better future

With proper planning, every goal is reachable. The same is the case with achieving a better future family for your future. Here are some tips to help you with your dreams.

Set financial goals

Setting up a practical and achievable financial goal is the most crucial aspect. In the absence of this strategy, you will only earn to cover your current expenses. Depending on your family’s needs and budget, your financial goal could be anything, such as:

Buying a dream home or car
Retirement planning
Foreign trips or dream holiday
Child or grandchild higher studies
Child Marriage

Household budgeting is the key.

Now that we know the importance of setting financial goals, you need money to achieve them. Budgeting is the key to fueling the requirements of an additional member and saving something from your fixed income. By ensuring you utilize your money more productively in every field, you can save money for the big picture.

Here are some tips for efficient household budgeting.

Avoid or postpone non-essential expenses. However, the definition of non-essential or essential depends on your personal choices.
Avoid casual and frequent shopping. Instead, group your expenses and assign them to the monthly shopping list.
Use the 50/30/ 20 rule. It entails keeping 50% of the income for meeting essential expenditures, 30% for leisure, and 20% for savings.

Get Health insurance and life insurance.

Once you start to save from your income, set aside a percentage for paying health and life insurance premiums. Then, when it comes to securing your financial future, consider buying good health insurance and term life insurance. Good health insurance provides complete coverage for normal to critical illnesses, hence can save you from costly medical bills.

Similarly, term life insurance ensures your dependents get an assured sum in case of your death. So, the first thing you should do after childbirth is to add the child to your health insurance coverage.

Create emergency and retirement fund

An Emergency fund becomes more crucial if you have a big family dependent on you. So, you should build an emergency fund that can fuel your needs for six months. Then, if you lose your job or face any unplanned expenses, this emergency fund will come in handy. However, you must be disciplined enough not to touch this emergency fund to cover regular expenses. As the name suggests, withdraw emergency funds only if no other option is left.

Consecutively or after building the emergency fund, start building your retirement fund. In pursuit of fulfilling a family’s dream, most individuals forget their retirement planning. However, instead of regretting later, make retirement planning a priority.

Invest in Long-Term Goals

In addition to saving and securing your unplanned expenses, start investing in the long-term goals. Depending on your income and financial goals, you can consult a financial advisor to get expert tips on investing, tax saving, and growing your capital.

Moreover, you can follow the general thumb rule of not keeping all your eggs in the same basket. Said that it means your investment portfolio should consist of a mixture of elements like equity, debts, bonds, provident fund, gold, or real estate. Your investment should be according to your risk appetite.

Conclusion

Securing your family’s future is a multi-dimensional approach. First, create a plan and act swiftly depending on your income, financial goals, and family members. The best approach is to start small and start early. The next vital thing is ensuring your and your family’s financial stability through health and life insurance. Without these, you may lose your life savings to a single incident like critical illness.

Further, you have to secure your retirement from the same income. Therefore, consider three pillars: budgeting, savings, and smart investment for securing your family’s future.