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As a family caregiver, you provide physical care for your loved one who is unable to do so themself. You often have other responsibilities such as working or providing emotional support and guidance. Many of us caregivers often struggle financially because we spend money on our loved ones without considering our own financial needs. So, how do family caregivers manage to get everything done and stay financially stable? We have to understand the importance of financial planning and make a plan of our own.
Financial planning is an important family responsibility, regardless of your family’s income level or age. Financial planning can help you save for retirement, pay off debt and cover unexpected costs. It’s never too late to start planning for your financial future, and even a small amount of savings can make a big difference down the road.
What is Financial Planning?
Financial planning is the process of organizing your financial life. This includes creating a budget, saving for retirement, and investing, e.g., in stocks or mutual funds. Financial planning can seem overwhelming, but it is important to have a plan if you want to achieve financial freedom. There are many resources available to help you get started, including online calculators and financial advisors. If you take the time to create a plan and stick to it, you will make progress and better your financial situation.
A family financial plan should encompass both family and personal finances. Take a moment to think about your financial goals, such as saving for retirement, buying a home, or sending your children to college. Once you have these goals in mind, create a family financial plan that will help you achieve those goals.
Create a Family Budget
One of the first steps in financial planning is to create a family budget. Your family budget should include all income and expenses. Here are some things that you should consider when creating your family budget:
- Monthly rent or mortgage.
- Monthly utility bills, such as electricity and gas.
- Food costs including groceries and dining out.
- Transportation costs, which include monthly transportation passes or monthly car payments/insurance/gas.
- Health care costs.
- Insurance costs, including health insurance premiums and life insurance premiums.
In addition to your family expenses, have a section of your family budget for savings. This can include a monthly contribution to a personal retirement account or a family savings account.
Many family caregivers also have to take on full-time jobs in addition to caring for their loved ones. If this is the case, you may want to create a budget that allocates money toward your job responsibilities outside of the family.
Create Family Savings Goals
One of the best ways to get on track with your financial planning is to create family savings goals. Having family savings goals will help you stay motivated and achieve your dreams for the future. The following are some family savings goals that you may want to consider:
- Emergency fund—put aside money in case of unexpected family financial emergencies. This fund should cover at least 3-6 months of family expenses.
- Home down payment fund—this is money that will be used to buy a house in the future.
- Retirement fund—contribute enough money to receive the full employer match, if one exists. This means investing enough money so that your employer will invest money for you. If the employer does not offer a family match, still aim to contribute as much as you can to your retirement fund.
- College savings—for your children who you plan to send to college.
- Vacation fund—decide on a monthly amount that the family will put into family vacation savings.
- Monthly family fun money—decide on an amount that will go towards family entertainment and family fun. This can include family members taking spontaneous trips to the ice cream parlor or going out to family dinners.
Write It All Down
Once you have your family budget and your family savings goals, write everything down. It is important to have family financial records so that you can track family spending and family savings, which will provide a clear picture of the family’s financial reality. Sometimes, just seeing the numbers on paper will help family members stay motivated toward reaching their family savings goals.
A good software to use to keep you on track financially is Moneyspire – this will help you with budgeting, keeping up to date on bills that need to be paid, your savings, etc.
Create a Family Investment Plan
Now that you are aware of the family expenses that need to be covered each month, as well as the family’s savings goals, the family needs to come together and discuss financial responsibilities, budgeting, savings allocations, and family investment decisions. Family members should sit down together on a regular basis (e.g., every month) to ensure that everything is tracking towards the overall goals.
Family investment decisions can include investing in stocks, mutual funds, bonds, and real estate. Knowing your financial strengths and weaknesses is important to know before making family investment decisions.
If family members do not already have a family savings and family budgeting plan in place, now is the time for family members to create one. Make sure that every family member knows how much money they need to contribute towards the family expenses and savings goals. Make sure that family members know what expenses need to be covered each month and each year. Investing for retirement should also be included in family financial planning conversations.
There are several financial advisors employed at various financial institutions, who would be willing to assist you to draft an investment plan. There are financial courses that you can take online to help you decide which investment vehicle is best for you and your family (just check to ensure that the person/institution providing the course is reputable). So, reach out and get the help you need today!
Do Not Forget About Insurance
Even though you are busy with budgeting, family savings goal creation, and investment decisions, make sure family members do not forget insurance planning. Make sure family members are sufficiently insured, especially life insurance for protection of the family’s financial resources.
Contact reputable insurance companies and speak with an insurance agent for advice suited to your family situation.
The Importance of Financial Planning for Family Caregivers
As a family caregiver, it is important to take control of your financial future. This includes creating a budget, setting savings goals, and investing in stocks or mutual funds. There are many resources available to help you get started, so don’t hesitate to ask for help. If you take the time to create a plan and stick to it, you will be on the road to success.
