Financial planning tips - are you a financially aware family?
Whatever stage your family unit is at, it's a good idea to be financially aware as a family. This means knowing the ins and outs of the family money pots and knowledge about what would happen in the future too. By being prepared, this should limit stressful situations and also ensure that you have enough in the pot for family fun, too.
Is one of you the sole finance-sorter in your household? Ask yourself, if anything was to happen to the person that looks after the money, would you know where the savings were and could you pay the rent or mortgage? If the answer is no or you’re not sure, it’s definitely time to sit down and have a chat together.
Create a financial fact sheet or a folder with your products and important documents. This includes things like savings accounts and mortgage details and then which provider they are with and all the relevant information such as account numbers. It’s also a good idea to have a list of which companies provide your utilities and when your current contracts are running out. You could do this on the same spreadsheet or in the same folder as your finances. It’s best to secure a spreadsheet like this with a password, just make sure you both know it and it’s memorable!
Your home may be repossessed if you do not keep up repayments on your mortgage.
People often say ‘you never have enough money to have a baby’, but it’s important to make sure that your income is secure enough for you and a child. Research has shown that for couples, raising a baby from when it’s born until age 18 costs over £150,000*. If you’re hoping to start a family in the near future, ensure that you’re comfortable with your earnings and that you have an emergency savings pot too.
One of the first things to remember when having a baby is to make or update any wills that you or your partner have. This protects your child in the event of your death so don’t forget to update further if you have any more kids.
After that, it’s time to think about children’s savings accounts. Saving for their future from a young age means time is really on your family’s side. Perhaps ask grandparents and other family members to pay into your child’s savings account as an alternative to gifts when they are first born or for their first few birthdays. If you're interested in a Junior ISA then perhaps read our guide all about them.
As they get older and start to receive pocket money, consider checking out our 9 money lessons to teach kids now article for some specific examples and exercises on how to help them to know how to handle their cash. We also have our Money Academy which has a virtual classroom full of lessons for ages 4 all the way up to 14 all about earning, saving and spending money.
Families with older children
As children get older there’s a lot to think about in terms of savings and what needs to be paid out. You may need to think about school and university fees and you might want to contribute to their first cars or homes. We have advice on both how much you should save for university fees and when and how should you save for school fees if you would like to send your kids to independent school.
Family inheritance and retirement
Once kids have left home, you may be thinking about retirement or at least saving hard for the next few years until you’re able to give up work. If you’re unsure whether you have enough or simply want to boost your retirement fund a little further, read our 6 ways to grow your retirement fund article.
If you’re planning to leave your estate to your children then make sure this is detailed in your will, or you could set up a trust. Trusts can help prevent inheritance tax having too much of an effect on the assets that are being passed on and can be written into your will or set up during your lifetime with immediate effect.
Michael Spencer from our financial advice partner, Wren Sterling says;
"Planning ahead for retirement savings can help you achieve your goals earlier and have more time to enjoy your retirement to do the things that you wish to without financial burden. Your independent financial adviser can be with you all the way to make sure that your plans are on track with regular reviews. Remember, it’s never too late to start saving for retirement with the advantages of tax efficiency, tax relief and flexibility of products available."
Qualifying members* of The Nottingham's Member Rewards programme can receive an initial fee-free meeting for pensions, investments and protection advice from Wren Sterling.
All families, whatever life stage they are at, should have a budget. If you’re finding that you don’t know where your money is being spent, try to track your spending for a week and then look at where you could cut down. For example, if you notice trips out are costing a lot, try setting a budget for family entertainment and search for days out vouchers and discounts online. There will almost certainly be a section of family life where costs could be cut, from lunches at work to unwatched TV subscriptions and unused gym memberships.
Whatever your stage, make sure that all family members are aware of your financial situation. This means couples knowing where they stand with paying bills, saving as much as you’ll need for future occurrences and making sure you’re not spending on things you don’t need to be. When everyone is financially aware, including small children, your family has a good chance of being in an at least educated, if not positive financial situation.
The Financial conduct authority does not regulate taxation & trust advice or will writing, university/school fees planning or deposit accounts.
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