Let’s have a look at the different financial needs which you and your family can have and how you can plan for such needs effectively –
1) Planning for Self
As you become financially independent, you need to address your financial needs and plan for your goals. These goals include –
Let’s understand how you can plan for each of these goals that you have –
Planning for wedding
Weddings are once-in-a-lifetime affair and involve considerable expenses. As such, you need to plan for them. Ideally, you should plan for your wedding related expenses in advance. You can set aside funds regularly to create a considerable corpus to meet the expenses of your wedding. Alternatively, if you are planning to get married in the near future, you can avail a personal loan. Personal loans are unsecured loans which give you funds for immediate financial needs.
Here are some pro tips on how to plan your wedding finances
Planning for wedding related expenses should also include planning for a honeymoon. As with weddings, honeymoons are also a once-in-a-lifetime affair and can prove expensive if you plan a perfect itinerary. You can, therefore, save in advance or opt for a personal loan to fund your honeymoon expenses
Though it seems far off, you need to plan for your retirement from an early age. When you do so, you can save small amounts over a long term period and build up a considerable corpus. This corpus would, then, help you fund your retirement expenses. You should choose suitable investment avenues for investing your retirement fund based on your risk appetite. Also keep in mind inflation and its effect on living expenses so that your corpus can be inflation proofed
2) Planning for Family
Once you have taken care of your needs, you should focus on the financial needs of your family, i.e. wife and kids. Here’s how you can plan for your family’s needs –
Planning for a DINK family
A DINK family means Double Income No Kids. This family is where both the husband and wife works and they have no responsibility of kids. These families have a high disposable income with no immediate responsibilities. If you have a DINK family and you are planning on having a child, you should, first create a corpus for your child’s future. Thereafter, you can plan for –
- Buying a home
- Buying a luxury car
- Going on international trips, etc.
A higher part of the disposable income should be directed towards savings so that when responsibilities increase, you have sufficient savings at your disposal. Retirement planning should also be started so that you can create a substantial corpus for retirement.
Planning for a family vacation
Vacations are a way to unwind and a family vacation helps you spend time with loved ones. So, if you take vacations regularly, you should plan for them. You can save and create a travel corpus for your holidays by investing in low-risk funds since vacations are a short-term goal. Moreover, if you earn a bonus or a profit, you can use it to supplement your travel fund. If, however, you are short on funds, you can avail a travel loan. It is a type of personal loan which gives you funds for travelling so that you can take a vacation with your family.
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3) Planning for Parents
Financial planning for your parents should be done separately because they have distinct financial needs which need to be met. You need to make your parents financially self-sufficient so that they can manage their finances even when you are not around. So, here’s how you can plan for your parents’ financial well-being –
First and foremost, you should highlight the importance of saving money. Your parents should be made aware of the fact that they need to save money for their retirement so that they can live comfortably. Help them save and choose the right investment avenues for their retirement needs.
Here are some way on how to save money as a parent
Parents often want to leave behind a legacy for their children. You should, therefore, help your parents do the same. Help your parents invest their savings and then create a Will allocating their property in the way that they want.
If your parents are financially dependent on you, buy a term plan for replacing your income in case of your unfortunate demise. Thereafter, insure your parents under a senior citizen health plan for their medical needs.
Pensions give you parents regular incomes in their old age so that they can be financially independent. So, help your parents plan their pension. Help them invest in a life insurance pension plan which would give them lifelong incomes
While you plan and take care of your and your family’s financial needs, you need to educate your family about the various assets and liabilities you have and how the same can be accessed. Store all your financial documents in one safe place and educate your family members about them. This would help them access the documents when needed when you are not around.
Your family is your most prized possession and their financial planning should also be sound and fool-proof. So, follow the above-mentioned financial planning tips for your family. For detailed information on any of these tips, you can take this FREE financial planning course and get solutions to all your questions.