Holiday Closing Notice

All IC branch locations and our Service Center will be closing at 1pm on Tuesday, December 24 and closed Wednesday, December 25 for Christmas.

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Holiday Closing Notice

All IC branch locations and our Service Center will be closing at 1pm on Tuesday, December 24 and closed Wednesday, December 25 for Christmas.

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December 16, 2024

Starting A Family:

Tips for Improving Financial Literacy and Creating A Financial Plan

Husband touching wife's stomach, trying to feel baby.

Starting a family is one of the most rewarding and significant milestones in life. Along with the excitement comes a new set of financial responsibilities and priorities. At IC Credit Union, we understand that building a secure financial future for your family is a top priority. In this guide, we’ll share tips on improving your financial literacy and creating a financial plan that supports your family’s needs and goals.

The Importance of Financial Literacy for Growing Families

Financial literacy is the foundation of effective money management, particularly when you’re responsible for a family. Understanding how to budget, save, and invest wisely can help you navigate the financial challenges that come with parenthood, from managing everyday expenses to planning for your children’s education. By enhancing your financial literacy, you’ll be better equipped to make informed decisions that protect and grow your family’s wealth.

Tips for Improving Financial Literacy

  1. Educate Yourself Together: As a couple, it’s important to be on the same page financially. Take the time to learn about personal finance topics together, such as budgeting, insurance, and investing. Consider reading books, attending financial workshops, or taking online courses as a team. This shared knowledge will help you make joint decisions that benefit your family
  2. Consult with Financial Advisors: A financial advisor can provide expert guidance tailored to your family’s unique situation. They can help you create a comprehensive financial plan, offer investment advice, and ensure you’re adequately protected with the right insurance policies. Many credit unions offer access to financial advisors who can assist you with these important decisions.
  3. Utilize Financial Tools and Resources: Make use of budgeting apps, financial calculators, and planning tools to track your spending, monitor savings, and manage your family’s finances. These resources can help you stay organized and ensure you’re on track to meet your financial goals.
  4. Attend Parenting and Finance Workshops: Many community organizations and credit unions offer workshops that focus on the financial aspects of parenting, such as saving for college, budgeting for childcare, and managing household expenses. These sessions can provide valuable insights and practical tips for managing your family’s finances.
  5. Teach Your Children About Money: As you improve your financial literacy, pass that knowledge on to your children. Teaching kids about money from a young age helps them develop good financial habits that will benefit them throughout their lives. Use age-appropriate lessons to introduce concepts like saving, budgeting, and the value of money.

Creating a Financial Plan For Starting a Family

Building a financial plan when starting a family involves considering both immediate needs and long-term goals. Here’s how to create a plan that supports your family’s financial well-being.

  1. Reevaluate Your Budget: Starting a family often brings new expenses, such as healthcare, childcare, and baby supplies. Revisit your budget to account for these costs and adjust your spending in other areas if necessary. Make sure your budget includes categories for both essential expenses and future savings.
    • Healthcare Costs: Consider the cost of prenatal care, childbirth, and ongoing medical expenses for your child. Ensure you have adequate health insurance coverage and set aside funds for out-of-pocket expenses.
    • Childcare: If both parents work, factor in the cost of childcare, whether it’s daycare, a nanny, or after-school programs.
    • Everyday Expenses: Budget for everyday items like diapers, formula, clothing, and other baby supplies. These costs can add up quickly, so planning ahead is key.
  2. Build An Emergency Fund: An emergency fund is more important than ever when you have a family to support. Aim to save three to six months’ worth of living expenses in an easily accessible account. This fund can cover unexpected costs, such as medical emergencies, job loss, or major home repairs, providing peace of mind during uncertain times.
  3. Review and Update Insurance Coverage: As your family grows, so do your insurance needs. Make sure you have the right coverage in place to protect your family’s financial future.
    • Health Insurance: Review your health insurance policy to ensure it covers your family’s needs. If you’re expecting a baby, check your plan’s maternity and pediatric coverage.
    • Life Insurance: Life insurance is essential for providing financial security to your family in case something happens to you or your partner. Consider both term and whole life insurance options, and choose a policy that offers sufficient coverage to replace income, pay off debts, and fund future expenses like your child’s education.
    • Disability Insurance: Disability insurance can replace a portion of your income if you’re unable to work due to illness or injury. This coverage is especially important for families who rely on a single income.
  4. Plan for Education Costs: It’s never too early to start saving for your child’s education. College costs continue to rise, so consider opening a 529 plan or an Education Savings Account (ESA) to take advantage of tax benefits while saving for your child’s future education expenses. Even small contributions can grow significantly over time with compound interest.
  5. Save for Retirement: While saving for your child’s future is important, don’t forget to prioritize your retirement savings. Continue contributing to your retirement accounts, such as a 401(k) or IRA. Remember, there are loans and scholarships available for education, but there are no loans for retirement. Ensuring your own financial security in retirement will also benefit your family in the long run.
  6. Create or Update Your Estate Plan: An estate plan is essential for protecting your family’s assets and ensuring that your wishes are carried out. Work with an attorney to create or update your will, designate guardians for your children, and establish powers of attorney for healthcare and finances. Consider setting up a trust to manage assets for your children if they’re still minors.
  7. Set Financial Goals: Identify your short-term and long-term financial goals as a family. Short-term goals might include saving for a family vacation or buying a home, while long-term goals could involve funding your child’s education or paying off your mortgage. Having clear goals helps you stay focused and motivated, and it allows you to measure your progress over time.

Conclusion

Starting a family is an exciting and transformative experience that brings new financial responsibilities. By improving your financial literacy and creating a comprehensive financial plan, you can provide your family with the security and stability needed to thrive. At IC Credit Union, we’re here to support you with the resources, advice, and financial products that can help you achieve your family’s financial goals.

Stay tuned for more tips in our financial literacy series, where we’ll continue to explore financial planning for different life stages. If you have any questions or need assistance with your financial plan, don’t hesitate to reach out—we’re here to help you build a brighter future for your family!