How to make a financial plan for your family
Every parent wants the best for their kids. If you want to make their dreams a reality it’s time for a financial plan
Set financial goals
The first step to making a financial plan is to consider your goals.
Not every child will go to university, or get married, but all children do need a place to live in adulthood.
You might not be able to buy a house for your children, but could you afford to save up £10,000 to help them with a deposit on a house?
Work out how to get there
If you wanted to save £10,000 to help your child with a deposit on a first house, how much do you need to save, and for how long?
Assuming an annual interest rate of 5%, you need to save £35 per month for 19 years and 10 months to get to £10,000. That’s according to the
Money Helper’s Savings calculator – try it yourself and see what you could achieve.
£10,000 might seem like a mountain to climb, but £35 a month? That’s doable.
Track your spending
In order to ensure you can save enough to meet your goals you need to get a handle on your current spending.
Track your spending with a spreadsheet, a budgeting app on your smartphone or a pen and paper. Add all income and outgoings so you can get an accurate picture of your cash flow. This should help you to understand what you need to cut to meet your savings goals.
Divide your spending into essential and non-essential. This way you can see if there are any obvious savings to make. Quickly you’ll be able to identify how much your family spends on unnecessary outgoings – cash that could otherwise be used to save or invest for the future.
You might be able to make savings on compulsory things like utility bills too. Switching suppliers tends to help you get the best deals. Comparison sites like uSwitch, Money Supermarket and Compare the Market can help you compare and find better deals.
Create a family budget planner
And stick to it.
It’s impossible to predict all expenses, so you might want to make “pots” of money available for certain things each month. Maybe it’s £100 a month for entertainment, technology upgrades or new clothes, for example.
Some simple family financial planning can help to ensure that these small, unplanned costs don’t send your family finance plan off course.
Matching your plan with your actual spending can help you see where things went wrong, or right.
Clear outstanding debts
The first thing to do is clear any outstanding debts, as the interest you pay on this could eliminate any interest gained from your savings (or growth from your investments).
Student loan debt is a bit different because:
- You only make payments if you earn above a certain amount per week, month or year.
- The debt doesn’t affect your credit score.
- If it’s not paid after 30 years it is written off.
Create an emergency fund
Once debts are cleared, many people recommend having an emergency fund in an easy-access cash account to pay for unexpected costs such as home repairs or sudden changes in circumstances.
Save or invest for the long term
The best ways to try to grow your money over the long term is:
- High interest cash savings accounts
- Investments
Cash savings accounts are offering relatively low interest rates. The cash savings accounts with the best interest tend to be regular savers, where a minimum monthly deposit is required.
Consider the affect of inflation on your savings. If the interest rate doesn't keep pace with inflation you lose money in "real terms" - which means the spending power of the money is reduced over time.
Investments tend to outperform cash savings over the long term, so you might consider investing your money instead of saving it. This comes with the risk that the value of your investments could fall.
Involve the whole family in your financial planning
Perhaps the most important thing is to talk to your partner and others about your financial health. Work out as a family what you think you could save money on, and what you are hoping to be able to pay for in the future.
Remember – this affects them too, and including them in your family’s financial decision making can help everyone understand how they can help, and why.
By being open about your financial successes, worries and goals you can better understand what you are trying to achieve as a family and stay on the right path.
Looking for a simple way to invest over the long term?
With our stocks and shares Junior ISA you can start investing from just £10 per month up to a maximum of £9,000 in the current tax year on behalf of a child. Anyone can pay in, and the child will gain access to the account once they are 18 years old.

Junior ISA
Your kids deserve a head start. Invest in their future with our tax free savings accounts.
DO NOT DELETE
Our Family Bond and Junior Bond are Tax Exempt Savings Plans which allow you to invest £25 per month or £270 per year for ten or more years. As long you keep up payments you - or the child - will receive a tax-free lump sum when the policy matures.

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