Planning for finances and for your budget can already be difficult when you are living alone, and now that you have a family, you will see how much more challenging it is to properly plan where you are supposed to spend and save your income. Because many people often have no idea how to plan finances and budgets, a lot of them would often walk into pitfalls, which is a problem that may happen in the future.
But, if you see the signs of pitfalls, you will be able to prevent them from happening and remain financially stable for your family. Here are 15 pitfalls that you should watch out for when financially planning for your family.
Never Talking About Money With Your Spouse
Communication is a big foundation of a healthy relationship, and while many married couples talk about a lot of things focused on different topics, what many of them don’t talk about is money. So, as much as possible, you should talk about money and everything else connected to it, like paying bills, saving money, investing in something, and more. Money is a topic that can never be ignored, especially by married couples. If both of you don’t really talk a lot about money, start the habit of talking about it slowly and getting used to discussing it at least once or twice a week.
Letting Only One Person Control the Money
Another mistake that married couples make that will eventually become a pitfall is letting only one person control the money. If both persons involved in the marriage have a source of income, the one that earns the most would usually have control over money. Over time, that person will be controlling the money too much and may cause problems in the relationship. Never let one person control the money and learn how to work together to solve financial issues.
Spending Too Much on the Child
As new parents, we often can’t help ourselves from buying anything and everything for our child. And while it is great that you have money to spend on the needs and wants of your child, the overspending can eventually lead to a pitfall where the child will become spoiled, and you won’t be able to save money for other things. So, only give your child their needs while being picky in what to buy for their wants.
Never Planning a Budget
Never planning a budget is arguably one of the biggest pitfalls that a lot of families walk into. There are many married couples that just go with the flow wherever their finances take them, but what they don’t understand is that they would often overspend on things when they don’t have a budget or are not monitoring how much they actually spend. Plan a proper budget for at least one month so that you and your spouse will have better control of your money or income.
Bad Family Planning
Family planning is essential if married couples want to be financially stable while also not dealing with a lot of problems. Without proper family planning, it would be quite difficult for you to raise many children, and this is further emphasized if you don’t really earn much at work or for the business. There are plenty of married couples that want to have many children, but it is sometimes not really ideal since raising just one child already costs a lot of money.
So, it is important to discuss with your spouse how many children you would like to have and if you both have the capacity to raise the children properly. In addition, you should also have a family planning consultant that will help you and your spouse plan out how big or small you want your family to be.
Being Used to Living for One
When you are used to living alone before getting married, it would often be difficult to get over the habit of trying to live for one instead of two. This problem often arises when one person in the relationship doesn’t think about his or her loved one when making financial decisions, and this could lead to bigger problems. It is important that you should get used to thinking about your spouse whenever you make decisions financially or in other aspects of living, as this can help build trust and improve the relationship.
Never Agreeing on Spending Habits
If one person in the marriage has many hobbies, it would often be difficult to control his or her spending habits. However, what he or she needs to realize is that spending too much on something that only one person can enjoy is not advisable in a marriage, so it would be much better to spend on things that the family can use or enjoy.
A married couple should agree on how much money they should spend a week or a month to avoid overspending on hobbies and other things. Having hobbies is not bad when you are already married, but it would be best to understand to live for two or three instead of one, which we have discussed previously.
A common mistake that couples make is keeping secrets from their loved ones, particularly financial secrets that involve paying for something without the knowledge of your spouse or making financial decisions without consulting the members of the family. This is a habit that should be abandoned right after getting married, as the marriage is built not only on communication but also on trust and honesty.
Not Having Life Insurance
Many married couples don’t see the importance of life insurance, and they will only see it once it is too late. So, as young and new parents, you should be able to look into life insurance and understand its importance for your family.
With life insurance, you will be able to still provide for your loved ones even if you pass away or something bad happens to you. Be sure to get personal insurance instead of relying on the insurance provided by your employer, as there is a very big chance that the employer-provided insurance will get terminated once you resign or get fired from the job.
Not Having a Safety Net or Emergency Funds
There will be moments when we will lose our job or a disaster will hit our home. For those situations, it is important to have a safety net or emergency funds that we can use in order to still be financially stable. A lot of married couples today don’t have a safety net prepared in case of emergencies, disasters, or issues, and it is only after those occur that couples will realize that they should have saved money. Save money and don’t spend them on anything so that you can have emergency funds prepared.
Not Preparing for the Education of Your Child
Raising a child is a long-term commitment, and one of the tasks that you need to do to raise a child properly is to prepare for his or her education. Although children in school are fairly common for a lot of families, there are some couples that aren’t able to provide education for their children simply because they don’t have the budget or the savings to do so.
Fortunately, there is at least a couple of years before you need to enroll your child in a school, and those years when the child is still a baby or a toddler should be focused on saving money for the child’s education. It is also in those years that couples should thrive on having a more stable source of income, which can come through businesses or having a high position at work. Work hard and do your best for your child so that he or she can grow with proper education.
Not Dividing or Planning Financial Responsibilities
Financial responsibilities should be divided between two people in the marriage, but there are certain instances where one person will have to stay at the house in order to take care of their child, which prevents him or her from having an office job. So, most of the financial responsibility would fall on only one person, and this would result in too much stress and pressure.
The best way to plan financial responsibilities is to talk about them and find a source of income that allows them to take care of the child while still having a job. Fortunately, there are now plenty of remote or work-from-home jobs available online, so one person in the marriage can stay at home and take care of the child while also having a job.
Forgetting to Teach Your Child about the Importance of Money
Financial plans shouldn’t just stop at the parents in the family, as the children would also need to learn about the importance of money so that they will be able to know how to save and spend less. It is very important to educate your child about the value of money, as not knowing how difficult it is to get money will lead to them being spoiled and always disappointed whenever they don’t get something they want. So, educate them as early as possible so that they can understand whenever you can’t get something for them and learn that money should be saved because it is difficult to get.
Never Using Discounts for Expensive Necessities
If there are discount codes and vouchers that you can use to reduce the price of expensive necessities like bags of groceries or pieces of furniture, then you should definitely use them in order to save more money, which you can use to spend on other things like bills or expenses. There are thousands of people that ignore discount coupons in physical stores and online shops, as they never really saw the use of those coupons. However, if you are a frequent buyer in a specific store, it would be highly beneficial for you to collect coupons since you can use them for future purchases in that shop. Be sure to collect as many coupons or discount codes as you can so that you will be able to get products at a lower price.
Never Saving for Retirement
It is not surprising that millions of married couples around the world aren’t really prepared for retirement, as they have been too focused on providing the best for their children that they forget to save money that they can use for the future, specifically in the time where they wouldn’t have the energy to work 9-to-5 jobs anymore or are too old to be qualified to work. So, as early as possible, you should save enough money to make you and your spouse financially stable once you reach the age where you are considered the elderly.
The pension is usually not enough for the financial stability of senior citizens, so it is incredibly important to save money for retirement funds. If you have properly raised your children, they will be able to help you when it comes to bills or expenses at home, but you really shouldn’t rely on your children to support you when they already have a family of their own. Save for retirement in order to have financial stability, especially during times when you won’t have a stable source of income.
And these are 15 of the biggest and most common pitfalls that families or married couples fall into whenever they are financially planning. Now that you know more about these pitfalls, we hope that you can stay away from them as much as possible and learn how to save money for your and your family’s future.