With great power comes great responsibility.
In your case, the birth of your first child automatically qualified you for this great responsibility. From the challenging task of taking care of yourself, to learning how to work cohesively with another person when you got married, you now have to lead a beautiful child towards his or her own independence while keeping sight of your personal goals.
Seems tricky trying to juggle it all doesn’t it?
Fortunately you are not alone and many couples have gone down this identical path and worked their way out. If you have yet to set up a family budget or constructed a will, there is no better time to do so than now.
Why financial planning
For the sake of your financial health, I appeal to you to do so as soon as possible, without trying to be too precise at the beginning.
It is probable that you are currently planning to purchase or are already living in your own house, while the increasing bills and cost of living with the additional mouths to feed, is causing you greater frustration than before.
That means it can get discouraging. But take it slow and steady, talk and work things out. Money issues can be touchy and it is in your best interests to involve your family so everyone can arrive at a mutual understanding about the family’s direction and financial objectives.
Issues to ponder
If you haven’t already bought a house, do you want to buy one? Or are you happy to live with your parents?
Buying a house in Singapore is a very heavy commitment. Not many people are able to afford a house solely with their savings. Chances are you will have to take a loan from the bank and spend a large part of your peak years repaying it.
Next, is purchasing a car high up on your agenda?
Again this decision will determine where a considerable amount of your budget will go to.
Last but not least, do you think it is time to set aside money for your child’s university education?
Where you intend to send your child would determine how big a sum you need to plan for.
How you can start right now
Here are the financial planning tips and strategies that I shared with my clients who have a young family with children.
- Set aside an emergency fund
- Prioritize your goals and aspirations
- Track your expenses
- Pay yourself first. Allocate a portion of your income into a “savings account”
- Investment Planning
- Protect your family’s goals and aspirations (Insurance Planning)
- Make use of allowable tax deductions
- Monitor and Review your plan (to ensure you are on track or if goals change)
You can start implementing these strategies to plan your finances well for a better financial future for you and your family.