Financial Planning for Families Checklist 
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Last Updated on May 6, 2023 by Rebecca
Making smart financial decisions for your family is important for reaching your money goals. An important first step in financial planning for families is figuring out where you want to get to, based on where you are now.
Hiring a professional financial advisor can help you get your family’s money plan on track. But if you don’t have room in your budget for that, it’s possible to tackle personal financial planning yourself.
Today, we’re sharing some of the best financial strategies for families to help you get ahead and reach your short- or long-term goals.
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Table of Contents
What Is Financial Planning for Families?
Financial planning simply means creating a plan for managing your money so that you can achieve specific goals. This type of planning covers different areas of your personal finances and includes things like budgeting, retirement planning and investing.
Financial planning for families includes those same things but it addresses some of the unique financial challenges families face. For example, you might be wondering how to juggle retirement savings with college savings or how to make a realistic budget and break your reliance on credit cards.
Creating a financial plan as a family is a good idea if you’re hoping to make the most of the money you have while growing wealth for the future. It can allow you to ensure that your family’s financial needs are met and that you’re building financial security for the long term.
Financial Planning for Families Checklist
Before diving into how to create a family financial plan, there’s one important thing to remember. Every family’s financial situation is different which means your starting point and goals may not be exactly the same as your best friend’s or a co-worker’s.
You may face certain financial issues or challenges that others don’t or you might have gone through life changes that have affected you financially that other families haven’t experienced.
Likewise, you might feel like you’re behind other families financially when it comes to things like maxing out retirement plans or paying down student loans.
One of the most important things to remember when creating a comprehensive plan for your family is to focus on your own needs and your own financial goals. Simply creating a solid plan and committing to it can go a long way toward improving your financial situation.
Here’s how to get started with financial planning for families.
1. Start with a budget
A budget is a basic building block for financial success and the importance of a family budget can’t be underestimated.
Your budget is your family’s plan for spending money each month. On one side, you have the money that comes in; on the other, you have the money that goes out.
It sounds simple and it is but too many families overlook this invaluable financial management tool.
So if you don’t have a budget yet or you struggle to stick to one, making a realistic family budget is a great place to start. As you make your monthly budget, you can start tracking your expenses each month to see where your money goes.
Scheduling a regular budget date as a family is a great time to review where you are for the month. You can do that weekly, biweekly or monthly and it’s a great opportunity to look for areas where you might be able to cut back on unnecessary spending.
Related post: 30 30 30 10 Budget Rule: A Simple Way to Spend and Save
Pro tip: While you’re making your family budget, you can encourage kids to try making a needs/want budget of their own.
2. Grow (or start) your emergency fund
An emergency fund is money that you set aside for an unexpected expense or life event that affects you financially.
For example, if you get laid off from work you could rely on your emergency fund to pay the bills until you’re able to find a new job. Or you might use your emergency savings account to pay for an unplanned trip to the vet if the family dog eats a sock.
How much money should you have in your emergency fund?
Most financial experts recommend keeping three to six months’ worth of expenses in emergency savings accounts. So if your expenses are $5,000 a month, you’d need to have $15,000 to $30,000 in emergency savings to have enough money to satisfy that rule.
If you’re starting from scratch with building an emergency fund, you might set the bar lower.
For example, you might aim to save a baby emergency fund of $1,000, then work on increasing that to $5,000 or $10,000. Or you might save a certain amount of money, based on the number of family members you have.
So if you’re married with two kids, you might save $1,500 per person or $6,000. In the beginning, the dollar amount isn’t as important as being consistent with your savings. Automating transfers from checking to savings every payday is one of the best ways to get into a regular savings habit.
Pro tip: Ready to start saving? Consider keeping your emergency fund in a high-yield savings account which can pay a higher interest rate on deposits.
3. Clarify your family’s financial goals
Setting goals is an important part of financial planning for families. Goals give you a blueprint to follow for money management.
What your family’s goals look like can depend on where you are financially. Examples of family financial goals can include:
- Saving money toward a down payment on a first home if you’re tired of renting.
- Paying for the birth of a new child (or a first child) if your insurance won’t cover everything.
- Setting aside money so you can buy a new car in cash and avoid an expensive auto loan.
- Creating a cash cushion that would allow you to make a career change that might require a pay cut.
- Saving money toward college costs for your kids.
- Paying off your mortgage early so you can retire early.
- Funding a comfortable retirement so that you don’t have to worry about working forever.
Some of these goals are bigger than others which affects how much time (and how much money) it will take you to achieve them. A great next step for working on your goals is to make them S.M.A.R.T.
SMART goals are goals that are:
So, say you want to buy a first home and you need money for a down payment. That’s a broad goal but you can make it SMART by setting a goal to save $20,000 in 12 months.
The goal is specific and relevant since you have a set dollar amount you’re working toward. It’s measurable and time-bound because you’re setting a time limit.
Whether it’s achievable can depend on how much of a financial contribution you’re able to make to your goal each month. But again, that’s why having a budget is important so that you can work savings into your cash flow.
4. Tackle debt repayment
Debt can be a huge barrier to achieving your financial goals as a family. So no discussion of financial planning for families is complete without talking about how to get rid of debt.
First, make a list of all the debts you have and how much you owe to each one, including:
- Credit cards
- Student loans
- Car loans
- Personal loans
- Mortgage loans
- Any other loans, including business loans or payday loans
Next, ask yourself which ones you want to get rid of first. Credit cards are usually a good place to start since they tend to carry the highest interest rates but you might want to ditch your student debt instead or knock out the last $5,000 of your car loan.
Once you’ve got an idea of which debts you’re starting with, go back to your budget again and see how much money you can afford to put toward them each month above what you’re already paying.
Pro tip: Transferring high-interest rate credit debt to a card with a 0% APR could save money and help you pay off debt faster. You can easily compare balance transfer offers on CreditKarma.
5. Consider retirement planning
Retirement might be decades away but it’s never too soon to start planning for it. While Social Security income might help cover some of your expenses, it may not be enough to fund a comfortable retirement for you and your spouse or partner.
If you have yet to take the first steps toward planning for your own retirement, here are a few tips for getting started:
- Make sure you’re enrolled in your 401(k). If you have a 401(k) plan at work, make sure you’re using it. At a bare minimum, it’s a good idea to contribute enough to your plan each payday to max out the full employer contribution if one is offered.
- Consider how you can boost 401(k) contributions. Do you get a raise each year? Increasing your 401(k) contributions by the same amount is an easy way to save even more for retirement.
- Open an Individual Retirement Account (IRA). An IRA is a tax-advantaged way to save for retirement on top of what you might be putting into a workplace plan. You can open a traditional or Roth IRA, depending on your income level. And even if your spouse doesn’t work, you could open and fund a spousal IRA on their behalf as long as you file a joint tax return.
- Set up a Health Savings Account (HSA) if possible. A Health Savings Account is a tax-advantaged account that’s designed to help you save money for future healthcare expenses. If you have a high-deductible health plan, you might be able to open and fund an HSA and snag a few tax breaks in the process.
- Fund a taxable account. Brokerage accounts give you more flexibility with investing since you can choose from a wider range of investments. And unlike 401(k) plans or IRAs, there are no limits on how much you can invest each year. You can open a brokerage account with as little as $100 at M1 Finance.
Pro tip: Consider using a personal finance tool like Empower to track all of your financial accounts in one place.
6. Check your insurance coverage
Insurance can protect you and your family in different ways, depending on which types of coverage you have.
For example, if you need to take your daughter to the doctor then your health insurance policy can pay for the visit. Or if you get into an accident then your auto insurance can help pay for the costs of repairing your vehicle or the other driver’s.
One often overlooked area in financial planning for families is life insurance.
Life insurance is designed to pay out money to your loved ones if you pass away. They can use that money to pay off the mortgage, cover final expenses or pay other bills.
There are different types of life insurance policies families can choose from but term life insurance is usually the most affordable option, especially if you’re young and healthy.
Term life covers you for a set time period and it’s something all kinds of families might consider, whether you’re new parents, a stay-at-home parent or a single parent.
Pro tip: Enter your personal information to get term life insurance quotes and compare rates at Fabric.
Long-term care insurance is something else to think about if you think you or your better half might need nursing care in the future.
According to Genworth Financial, the average cost of long-term care insurance ranges from $59,488 to $108,405 per year, depending on the degree of care required. Long-term care insurance, or insurance products that combine life insurance with long-term care coverage, could help you to pay for those expenses if you have them later in life.
8. Think about college planning
If you have young children, college might not be on your radar yet but it’s something to think about when discussing financial planning for families.
College costs have skyrocketed in the United States and as a result, Americans are carrying an estimated $1.75 trillion in student loan debt. Opening a college savings account for your kids is something you might consider if you’d like to help them pay for school.
You can set up separate accounts for each of your kids through a platform like Unest and contribute a little money each month. Whether you have small children or your kids are already teenagers, every penny you can save for college will help.
9. Don’t forget estate planning
Estate planning deals with what happens to your estate at the end of your life. A comprehensive estate plan can include:
- Writing a will and choosing an executor
- Creating a trust
- Setting up an advance health care directive
- Naming a medical and financial power of attorney
- Buying life insurance
- Deciding who should inherit real estate you own
- Naming beneficiaries to your bank account or retirement accounts
How much time you spend on estate planning as a family can depend on how complex your estate is.
If you have a simple estate, then you could make your own will and trust online using a software program like Trust & Will. On the other hand, if you have a lot of assets or you have a special situation like planning financially for a child with disabilities, then it might help to talk to a professional financial advisor.
How to Get Help With Family Financial Planning
If the idea of creating a financial plan for your family is overwhelming, you don’t have to go it alone. There are plenty of financial professionals out there who could help you get on track, including:
- Financial counselors
- Debt management specialists
- Financial planners
- Financial advisors
The difference between them usually lies in what certifications they hold and what they do.
Financial counselors, for example, can offer financial counseling on things like budgeting, debt or how to manage a joint account with your spouse. They recommend solutions, rather than specific financial instruments.
Professional advisors help families and individuals by offering advice on their financial situation. They do that by assessing their client’s goals, looking at the family’s income level and debt and recommending financial products or strategies to help them get ahead.
Financial advisors can have different titles that can indicate what they do.
For example, a registered investment advisor (RIA) offers advisory services that are focused on investments. A certified financial planner usually takes a broader approach and looks at things like budgeting, debt, estate planning, insurance and taxes.
There are different educational requirements required for different types of advisors, which means they’re experts in different areas. A CFP, for example, has to pass a certification examination administered by the Certified Financial Planner Board of Standards (CFP Board) while RIAs have to take the Series 65 exam, which is offered by FINRA.
All that is to say that not every financial advisor is the same. So if you’re interested in finding an advisor who specializes in financial planning for families, it’s important to know how they’re different.
Also, consider what you might pay for financial advice.
You might be able to book a free initial consultation with a financial counselor or financial advisor. But if you decide to use their services it’s a good idea to ask what fees they charge.
Pro tip: You can get matched with financial advisors just by answering a few simple questions with WiserAdvisor.
Financial Planning for Families FAQs
How do you make a family financial plan?
Making a financial plan as a family starts with making a budget and tracking spending. It also includes creating a plan for debt management and repayment, saving for emergencies, investing for retirement and planning for college. Families should also think about what kind of insurance they might need for their financial plan and how to shape an estate plan.
What are the objectives of financial planning for families?
Family financial planning is designed to help families manage their money more effectively so that they can achieve their financial goals. Those goals might include buying a home or paying off a mortgage early, retiring ahead of schedule, starting a business or helping kids to get an education without taking on student loan debt.
Why does a family need a financial plan?
Families can benefit from having a financial plan because it can help them spend less, save more and build wealth over the long term. Without a family financial plan, it can be harder to pay down debt, save, invest and reach your big or small money goals.
Final thoughts on financial planning for families
Financial planning might not sound all that exciting but it can definitely create some positive results if you’re putting in the work to improve your family’s money situation. The sooner you get started with planning the better if you’re ready to take control of your money.
Need more money tips? Read these posts next:
- 8 Important Money Lessons Kids Need to Know
- Raising Money Savvy Kids: 4 Essential Tips for Parents
- 30 30 30 10 Budget Rule: A Simple Way to Spend and Save
How are you creating your family’s financial plan?
About the Author
Rebecca is a certified educator in personal finance (CEPF) and a money-saving expert. As a single mom of two teens, she knows all about the importance of family budgeting and financial goal-setting. She shares her best tips about saving and managing money at Savvy Money Lessons. You can also read her work online at Bankrate, Forbes Advisor, Investopedia and other top publications. Learn more