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Providing for your family can be both a source of pride and a source of angst. As a mom or dad, it’s natural to want the best for your kids, and that includes a firm financial footing. Here’s what you need to do to ensure your family’s future is secure.
Begin with the Basics
A sound budget is a basic essential in mapping your financial journey. After all, if you don’t have a good feel for how much money you have coming in and how you typically spend it, you can’t make a plan for where it goes.
Millennial Money recommends starting with tallying your disposable income, and then listing all of your expenses, both fixed and variable. Deduct the expenses from your income to find out whether you’re making ends meet or if you need to make adjustments.
From there, think about your financial goals and what you will do to meet them. For instance, you should be saving for your retirement, and you might want to establish savings for your children’s education. Your goals should be represented in your budget so you can meet them in due course. Then follow the path you’ve set. To keep things convenient, you might want to add a budgeting app to your phone.
A Roof Overhead
Owning your first home is a big part of the American dream. It’s also a big financial step, and a daunting one at that. Start crunching some numbers to ensure you don’t get in over your head, keeping in mind that your total housing costs shouldn’t go beyond 30 percent of your income.
When the time comes, mortgage companies will examine things like your spending habits and credit score. That information will affect the amount of loan you qualify for and the interest rate that will apply.
The amount of your down payment will also influence your loan—the more cash you put down, the lower your monthly payment, so it’s in your best interests to be saving with that in mind. Plus, putting more cash down makes your offer that much more tempting to the seller.
Picking and Choosing Lenders
Next, you need to decide who you want to do business with. You should look to banks you already have a relationship with and make some comparisons, then cherry pick the best to apply for pre-approval. If you have trouble finding a good fit, Benzinga points out some lenders are particularly agreeable to working with first-time buyers. With pre-approval in-hand, you’ll be ready for some serious house hunting.
House hunting is a process in itself and can become overwhelming quickly. Do some online window shopping, develop a list of characteristics you’ll be looking for, and hire a qualified real estate agent to represent you in the hunt—this is their territory, so they will provide invaluable input into the market. With the right agent on your team, soon you’ll be settling your family into your dream home.
Set up a Safety Net
Nobody enjoys contemplating what life would be like without them, but when you have a family it’s critical to consider how they would manage if something happens to you. With that in mind, think through your life insurance coverage and whether or not you have enough.
Per CNN, average households should have coverage for 5 to 7 years of income; those with small children should aim to replace a full decade of their salary. Bear in mind that employer-based life insurance is rarely sufficient; make some calculations to ensure you’re on track.
Along those same lines, you should establish legal guidelines for raising your children in the event you aren’t there. A will, powers of attorney, advanced directives, and so forth will ensure that the vision you have for your family comes to fruition if the worst case scenario should occur.
Looking to the future brings on a range of emotions for moms and dads. Put your mind at ease by ensuring your family has a sound financial footing for the journey. Cover the basics, invest in your four walls, and prepare for the worst case scenario so your family’s future is secure.
Read more from Sara Bailey at thewidow.net.