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Best Investment Practices For Young Families
According to the recent statistics, more and more unhappy couples are choosing to not get divorced because it would mean financial ruin. While that may be the case for the unlucky in love, the recession has certainly not made things any easier either for those who have just gotten married and started the process of raising a family.
If you have just made the leap from college to domestic life, then below are some savvy investment practices for you:
1. Take care of the rising costs of education.
For young parents, the first thing that you have to consider is the increasing cost of matriculation among other expenses. Even if your child isn’t even old enough to start walking yet, it’s always a good idea to start planning for their education all the way from primary school up to college and even through graduate school. With an increase of at least 25 per cent in tuition from 2002 to 2008, long gone is the old system of parents simply pitching in to help their kids get a college degree. Expect to foot the bill for your children’s education in the future. In fact, some parents are prioritizing saving for their kid’s educational fund rather than their retirement fund.
2. Start saving earlier.
One huge characteristic of young families is that they are restless and are more likely to go out for trips. While there is no law prohibiting fun, the simple truth is that the conventional ways that millenials have fun are expensive and cost money. While the kids do not yet have the capability to badger you for expensive gadgets and dance lessons is when you should be taking advantage of your finances and saving. This might mean limiting your out of town trips and only electing to go somewhere local for you yearly vacation, This also includes watching Netflix and making your own popcorn than going to the movies once every week. However, for these little sacrifices, you’ll be able to gain a heads-up in establishing your savings account.
3. Be smart with shopping for your first house.
This is a major purchase for a family that is still starting out, and you need to give it a lot of thought before you sign on the dotted line. As Nick Scali on twitter puts it, set a very strict budget for how much you can afford. This is the first rule.Taking into consideration your income and your different expenses, how much can you comfortably pay in monthly house payments while still being able to set aside enough for your savings account and other investment plans? And since you still have a growing family, you do not have to look for a sprawling yet expensive place. Lastly, never show up at an open house without reading up on some basic first-time homebuyer tips.
4. Don’t neglect your retirement fund.
In the distant future, your kids will be leaving the nest and you will have to start seriously contemplating about how you’ll be living in your twilight years. Take advantage of your company’s 401k if it is offered and make larger contributions when you can.
Kent Farell is not only a savvy financial writer but a registered financial planner as well. His blog provides the best insights on financial management and tips for those who wish to save more. He also shares intelligent articles about investing, financial management and lease financing.
