Guest Blog || Jim McKinley ||
When you’re young and earning an income, it can be difficult to think too far into the future. After all, you have more than ample time to grow your assets and prepare for eventualities, right? However, if you have a growing family, financial planning is something that you definitely shouldn’t put off. In fact, it’s a must to get started as soon as you can—not only to make headway on your savings, but also for your own peace of mind and, by extension, your family’s financial welfare.
The key is to learn the basic principles of sound family financial planning and then take solid measures to grow your family’s security and wealth—something Jordan Goodman, America’s Money Answers Man, can help you with. Let’s begin.
Gain considerable assets.
Contrary to popular belief, yes, you can start to build wealth at an early age. This can be done in a number of ways, including starting a business, which is a popular way to go about it. For most young people, investing can be an even better option. While investing does require effort, energy, and, of course, money, it can pay off in spades when done right. And the best part is, you can actually start investing with very little money.
In the same vein, assets can be more tangible, too, such as your own home. Indeed, this is among the best and most common goals for families—and for good reason. Of course, when looking to buy a home, you have to make sure that you have enough for a downpayment.
While there are financing options that eschew the down payment requirement, the fact is, borrowers often enjoy lower interest rates and better payment terms with the minimum 5 percent down payment that most lenders require, depending on loan type. For this reason alone, it’s definitely worth doing your best to make a down payment, which is arguably a financial goal that’s high up there with growing your investments or buying insurance.
Get life insurance.
Speaking of insurance, you have probably found yourself inundated with advice to buy life insurance the moment you reached adulthood. Again, this is for some very good reasons. The fact is, you do need life insurance, even as early as your 20s—and even more so, if you have a family.
At the most fundamental level, life insurance will ensure that your family’s financial needs are met, if something untoward happens to you at any point in your life. After all, you never really know what fate might dish out, and life insurance is a wonderful way to guarantee your family’s financial future in your absence. However, the benefits of life insurance don’t end there, too. Some types can, in fact, be used to pay off debts and other expenses, such as student loans, medical bills, funeral costs, etc.—making it a truly smart investment.
Grow your funds.
Finally, remember that you’re never too young to start thinking about your eventual retirement. In fact, the sooner you put together a retirement fund, the more financial security you can anticipate in old age. This, in turn, will allow you to keep yourself in the lifestyle that you desire post-retirement, as well as ensure your utmost safety and comfort as a senior. And while this is probably not something you think about at this stage in your life, know that it does take time to build up a comfortable nest egg, so make sure to start maximizing your retirement savings as soon as you can.
Your emergency fund is just as important, as well. The fact is, emergencies do happen, despite your best efforts, and building your emergency fund early on will all but ensure that you’re well-prepared enough to stay on your feet, despite whatever setbacks that life throws at you.
Suffice to say, financial planning is best started early in life so you and your family can enjoy financial security for a longer time, as well as so you can safely anticipate large gains in the future. However, know that just as it’s never too early to start, so is it never too late, either. Ultimately, there’s no better time to get started than the present.
As a former banker, Jim McKinley uses his background and skills to provide advice and valuable resources to anyone who needs help with their financial literacy. In his spare time, Jim spends time with his family and his dogs and he maintains his website Money with Jim.
Photo by Emma Bauso from Pexels