family and finance

7 Steps to Building Your Family Financial Plan

How to Develop a Comprehensive Financial Strategy to Set Your Family Up for Success

Every family will experience various stages of life and unexpected events as the members of that family grow. Having a strong family financial plan in place can help ensure that, no matter what your family encounters, you’ll remain on firm financial footing. Developing a comprehensive strategy for managing your money requires that you start with the basics – that means setting up a budget, paying down your debts, and building a solid safety net for emergencies. Depending on the family, it may also mean investing for retirement and starting a special savings account dedicated to future college costs.

Personal financial planning can be complicated enough, so financial planning for your entire family can be especially challenging. However, it’s not impossible. With dedication and deliberate care, you can make a family financial plan that works for everyone. No matter your family’s situation, there are key elements that should be included in any family financial plan. As you get started with yours, here are seven key steps to consider.

Budgeting & Spending

Just as with any financial plan, developing a budget that accurately represents your current financial reality is the cornerstone. Taking the time to put a budget in place can be time-consuming at first, but it’s important to know exactly where you stand financially so that you can plan for future financial goals in realistic ways.

The key to a good budget is to get specific. Start by writing down what you want to accomplish – the big financial goals – and then give those goals numbers and dates. How much debt do you want to pay off and when? How much money do you want to be saved and by what date? Having an exact amount along with a deadline, not only holds you more accountable but gives you a better picture of the steps you need to take to get there, which makes achieving your goals more likely.

Each month, be sure to continue tracking your spending so that you can fine-tune your budget and avoid overspending. Try to find time at the beginning or end of each month to reassess your budget – if you have more money than typical coming in or paid off one of your debts and freed up money that way, then you can start putting that money towards other financial goals.

If managing money is difficult for you to stay on top of, there is an abundance of budgeting apps that track expenses for you automatically to help you stay on track. There are also online budgeting software tools that you can use to help you build a budget as you’re getting started. However you decide to go about building and managing your family’s budget, the key to a good budget is having the discipline to follow it once it’s been put into place. So, try to follow it as closely as you can for optimal success.

Tackle Your Debt

Most of us are in the midst of paying off debts in some form or another. Making a plan for paying off any debts you have needs to be a crucial part of your family’s financial plan. As stated earlier, it’s better to be as specific as possible about your timeline for repaying your debts. How much of which debt are you planning on paying off and by when? If you have multiple debts, it may be helpful to start small and work your way up. You could also start with the account or that has the highest interest rate.


SEE ALSO: How to Use the S.M.A.R.T. Goal-Setting Framework to Set and Achieve Financial Goals


As you’re incorporating a debt repayment plan into your family’s financial plan, consider ways that you can potentially speed up the process. For example, refinancing your mortgage or student loans could allow for you to get a lower interest rate, meaning your money is going to be applied to the principal amount more than it was previously, while often freeing up more funds on a month-to-month basis, too.

Prioritize Your Goals

Building a family financial plan requires that you take a step back, consider the bigger picture, and get serious about setting goals for what you want to achieve with your money. Whether it’s saving a specific amount for retirement, putting enough money aside to pay for your kids’ college, or paying off your mortgage by a certain age, knowing exactly what you want to do with your money is crucial to financial planning. The clearer your destination is, the easier it will be to plan the journey to get there – increasing your chances of successfully achieving your money goals.

In addition to long-term goals such as these, you’ll most likely have short- or mid-term goals as well, such as saving $15,000 in your emergency fund or setting aside a specific amount for that dream vacation you want to take.

No matter the goals, it’s important to be realistic and specific in how you want to achieve them. Setting deadlines for reaching each goal and writing out the steps you’ll need to take to reach them can help hold you accountable and keep you on track.

Planning for Retirement

Retirement may seem worlds away, but it’s never too early to begin putting money away or investing for your retirement fund. You can begin by sitting down with your partner and taking stock of all the resources you have between the both of you and how you each picture your retirement looking. If you both work full-time, you may be able to start contributing to a 401(k) or similar savings account through your job. Be sure to see if your employers offer a company matching contribution and, if they do, try to max out your contributions each year so that you can benefit from the full match.


SEE ALSO: Fitting Equity Compensation into Your Financial Plan


Outside of 401(k) accounts, there are plenty of other methods to save for retirement, as well. Consider opening a traditional or Roth IRA, as well as investing in the stock market with appropriate risk. Additionally, think about how your Social Security benefits might play into your retirement plans as well.

Saving for College

It’s no secret that kids are expensive, but with college costs skyrocketing, this is becoming increasingly true. No matter how old your kids are, it’s a good idea to begin setting money aside for their college funds, should you want to help them with the burden of these future expenses.

There are specific savings strategies, such as a 529 savings plan, that offer ways to save money for college on a tax-advantaged basis. These can be super beneficial for both you and your children, and various people can contribute to the account – such as grandparents or generous family friends.

Be sure to include in your discussion things like scholarships, grants, financial aid, and the possibility of getting student loans. The older your kids get, it might be a good idea to begin talking with them about college options and affordability, as well as setting expectations regarding how much you want them to contribute to their education costs.

Buying Insurance

Most of us have insurance of some kind, be it health insurance or vehicle insurance. However, when developing a family financial plan, it’s important to seriously consider the role of life insurance. The general guideline when it comes to life insurance is that if you have anyone depending on you financially, then you should have a policy that covers your debts and obligations to them. If you’re raising children, you’ll want the security of a life insurance policy to ensure your family’s needs will be covered should the unthinkable or unexpected happen to you or your partner. Even if one partner works and the other doesn’t, it’s smart to get life insurance for each of you.

Sitting down with a financial advisor can be useful in determining how much insurance you’ll need for your unique situation. Some factors you may want to consider are how much you expect it to cost to raise your children, including college, and any assets you want to protect or debt you wish to pay off. You’ll also want to speak to an attorney about how you can properly name a beneficiary for your life insurance.

When it comes to life insurance, there is an abundance of options out there for you to choose from, so be sure to do your research and take your time to select the one that’s right for you and your family. Though it may seem arbitrary or superfluous, life insurance policies can be an affordable and efficient way to protect your family.

Estate Planning

In the same way that life insurance protects your family in the face of the unthinkable and unexpected, so too does estate planning. It’s uncomfortable to think about, but ultimately none of us know for sure what the future holds or how much time we have left. Unless you feel fully confident in leaving your personal and financial decisions to those you’re leaving behind or to state officials, it’s crucial that you take the time to sit down with an attorney to discuss your wishes should anything happen to you. It’s common to procrastinate with these kinds of things, but being proactive about ensuring that your wishes will be followed when you’re gone is a crucial part of developing your family financial plan.

Since children under the age of 18 cannot take control of inheritance money or make any legal decisions, simply listing them as beneficiaries won’t be enough. You’ll want to have guardianship papers in place that determine who will take over responsibility for your kids should you and/or your partner be incapacitated or pass away.

Concluding Thoughts

While it is possible to build a strong family financial plan solo, it may be beneficial to have a financial advisor at your side who can help you see the bigger picture and ensure that you’re using all the options available to you. Building and raising a family comes with many stressors and requires the juggling of a multitude of things. Taking time to deliberately create a family financial plan can ensure that no matter what comes, your family will be on firm financial footing.

At Paces Ferry, we offer a depth of knowledge and breadth of experience in helping our clients manage their money and invest it wisely with the big picture in mind. If you’re interested in sitting down with one of our professional advisors to begin building a comprehensive financial strategy for your family, reach out today for an introductory conversation so we can get to know you and your family’s unique financial goals.


Paces Ferry Wealth Advisors, LLC is a registered investment advisor with the U.S. Securities and Exchange Commission (“SEC”).  This material is intended for informational purposes only. It should not be construed as legal or tax advice and is not intended to replace the advice of a qualified attorney or tax advisor.


Zach Morris, CFP®

Zachary Morris, CFP® WEALTH ADVISOR & FOUNDER Having traveled to over 35 countries, Zach is a believer in Ralph Waldo Emerson’s statement that Life is about the journey, not the destination. Being a CERTIFIED FINANCIAL PLANNER™ provides Zach the opportunity to help clients define and realize their journey, and co-founding Paces Ferry Wealth Advisors, an independent firm, allows the freedom to define the client experience along the way.

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