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Tell them if a private college is out of
question. Let them know that they will most likely have to go to community colleges or state schools. Talk to them about your financial situation. They might have very unrealistic expectations that you know nothing about because they know nothing about family’s financial situation.
Let them know that your job is to provide a roof over family’s head, make sure there is enough to eat, heat and electricity so everyone can be safe and warm and their job is to get good grades to be eligible for as much aid for school as possible.
As long as they know you love them and that you are doing best that you can for entire family, they will understand. Explain to them that as long as they do their job, together you will do everything you can to help them fulfill their goals and dreams for future within your means.
You have to make sure that you don’t get so bogged down in planning for future for everyone else, you forget to plan for lifestyle you want to have during your retirement.
Again if paying for college is unrealistic for you, explain to your children that it is not possible for you to do so because if you do you might end up being a financial burden to them when you retire. Let them know you will do what you can.
While main purpose of financial planning is to have a better future, you also need to make sure you live well today and are comfortable. You won’t stick with any plan that has you feeling deprived and miserable for very long.
The next thing a financial plan should include is preparing for a secure retirement. With people living longer than they used to you have to plan for at least 20 to 25 years in retirement, if not more. You need to have plans for maintaining your standard of living, paying for medical care (with proper insurance in place) and remaining financially independent of your children (by having investments for income) so you will not be a burden to them.
Your plan also needs to keep taxes in mind. Have your financial planner look over your taxes now to see if you are paying too little or too many taxes. They can also advise you on which type of investments will be best for you tax wise. Some investments have more tax advantages than others.
For instance, with a Roth IRA you only pay taxes on money that your money makes in IRA when you withdraw it and not money that you contributed to it. Even if you withdrew every penny that you put into it, as long as you don’t withdraw income that your money made you won’t pay taxes on it until you do.
The last thing a financial plan should include is your final provisions, better known as your will. No one likes to think about dying, but let’s be honest we all have to do it sometime. Having your wishes drawn up as well as having appropriate insurance and financial documents all together can alleviate stress and anxiety for your family.
Grief over loss of a loved one is tough enough without adding burden of financial distress to it. Your plan needs to include a will and all related financial and insurance documents with it and an estate plan or trust that is designed to match your financial situation.
To recap main things a financial plan should include are an emergency fund, insurance to protect you from disaster, financial security and a comfortable standard of living for you and your family now and in future, a comfortable and secure retirement that provides for you and does not burden your children, making sure you are paying right amount of taxes now and that your investments are right for you tax wise also and finally putting your final wishes in writing to make sure they are carried out.
While those should be main components of a financial plan, there are other things that need to be considered. The stage of life you are at now. If you are in your twenties now you can afford to take more risk with your investments because you have more years to make up for any investment losses. If you are in your forties you might want to be a little more conservative.
Your lifestyle is another consideration. If you are a spender and not a saver you have to be realistic about whether or not you are willing to curb some of that in order to have a better financial future. If you have a problem staying away from credit cards you need to get a handle on that first. If you are type of person who spends more than they make in order to keep up perception that you are successful, your plan will not work.
Your plan needs to fit your lifestyle and not other way around. If you make a plan that forces you to give up too much of yourself in order to accomplish it, you never will accomplish it. Above all else when it comes to financial planning, you need to be honest about who you are financially right now and whether or not you are willing to make changes to have financial future you want.
You also need to be honest with your family. If your children are old enough include them in plan making let them feel like they are a part of it and that your overall goal is financial health and well being of entire family. This can help to avoid any disappointments that can come from not knowing what situation is. Letting your family believe that things are much better financially than they actually are will only cause problems in future.
Teresa Kaufman © 2004-2005. All rights reserved Personal Budgets to Fit Your Lifestyle, Needs and Wants < This article may be used in an ezine or on a website as long as the author's name, copyright information and an active hyperlink back to the site as stated directly below the copyright information.
