Article By Sara Bailey–guest blogger
Author bio: Sara Bailey is a blogger and the founder of TheWidow.net, a support network for individuals who have lost their spouses and are raising children on their own.
Financial planning is a lengthy and often stressful process for most; it comes with thoughts about an uncertain future, providing for loved ones no matter what the economic climate is, and how to comfortably get through retirement. Few of us want to add on to our responsibilities, so those thoughts can bring on anxiety and even depression. However, the benefits of planning ahead greatly outweigh the drawbacks. With the right amount of preparation, you can ensure that your partner and your children are well taken care of after you’re gone.
Estimate Your Worth
Knowing your worth is essential when you’re financial planning because it can help you see where you’re spending too much unnecessarily. Seeing a figure associated with your net worth will allow you to get an idea of how much you’ve earned, how much you’ve spent, and what the difference is between your assets and liabilities. As a homeowner, the biggest asset you have is likely your house, so you’ll want to calculate the value of your property right away. Of course, there are several factors that can influence that number, including the age of the home, the value of adjacent properties, and curb appeal. If you feel your home needs a boost, consider a remodel or even a few smaller changes, such as updating lighting or flooring.
Think About Higher Education
With the costs of education these days, it’s never too early to start thinking about how you’ll pay for your child’s college career. There are several options that will help you save and plan, including a 529 account, which comes with tax benefits. This option is one that comes with a lot to consider, as it must be used with a participating college and often doesn’t allow for living expenses. An education savings account will allow you to switch your child from public to private school and receive funds to cover tuition, tutoring, and school materials, among other things. If you’re unsure of whether your child will attend college, a basic savings account might be the best way to go. This way, there will be no limits on how they use the money.
Create a realistic budget
It can be tricky to create a realistic budget that you and your partner can stick to, but it’s an essential part of making sure you’re financially stable. Take a look at your expenses; sometimes, having them all written down in front of you can help when it comes to figuring out where to make cuts. For instance, if you’re paying for two different streaming services, choose the best fit and let the other go. It also helps to set goals to pay off debt, especially if you owe a lot on your credit card bills. Setting goals will help you define where your money should go each month.
Plan for Your Final Arrangements
It’s something that few of us want to think about, but planning ahead for your final arrangements can make a huge difference in financial comfort for your loved ones. Depending on whether you want to be buried or cremated, a funeral can easily cost you $9,000, which is a sum that can put many families in debt. Preparing now for your final wishes can save your loved ones a lot of time, stress, and financial burden during what will be a difficult time for them. Think about the costs you can prepay, such as a burial plot or headstone, and make sure your loved ones understand what your wishes are by putting them in writing.
Financial planning doesn’t need to be scary or stressful. Thinking about the future can be a little overwhelming when you have a child to take care of, but that’s exactly why it’s so important. Making a few small moves now can go a long way toward creating security for your family.