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3 Ways Growing Families Can End the Year Strong

Kids are expensive. Plan ahead to set them up for success later. 

Does anyone else remember that TV show called Rugrats that aired a couple decades ago? I caught a few episodes on Netflix recently and it struck me how many of the jokes I missed as a kid! But it got me thinking about the parents we see here in the office who may not be dealing kids quite like Tommy Pickles or Lil DeVille, but who do face challenges in raising their kids.

With the last few weeks of the year upon us already, I wanted to take some time to talk to parents with growing families about three ways to end the year strong, and set themselves (and their kids!) up for success in 2017 and beyond.

First, and we say this all the time, but parents: now, more than ever, it's crucial to have a fully funded emergency fund. I'm not going to throw out a one-size-fits-all number, but you should have enough to keep yourself out of debt in the event of an unforeseen expense. At the very least, you should have enough to cover your health insurance deductible, and you might want to consider a Health Savings Account if your plan allows it. Not sure how much you should aim for? Let us know. We can crunch some numbers for you and help you work toward saving that money.

We also always recommend automating emergency fund savings, even if it's just a small amount every month. The biggest and hardest step is simply to start.

Secondly, keep in mind that there are two areas rising in cost faster than the rate of inflation, and they are healthcare and education - probably your two biggest expenses when it comes to your kids, right? If you haven't already, before Christmas, start a 529 or other college savings plan for your children.

Gifts and toys are great, but starting a savings plan will help keep your household's toy population under control while planning for a bright future for your youngsters. Who needs more Legos to step on anyway?

Many clients ask us why they shouldn't just save for college in a simple savings plan, such as a money market. We generally recommend a 529 type plan for a couple of reasons. First, that pesky fact that education costs are rising faster than inflation means a simple savings account can't keep up. You're also missing out on tax-free growth in another type of account.

Finally, set your Christmas budget now, for this year and maybe even for the next couple of years. I'm not telling you to be a Scrooge - gift-giving is great. But setting a budget can help keep you from going overboard, or from splurging on all those black Friday deals for yourself.

If you're looking for ways to cut some of the stuff out of your Christmas, perhaps book a trip with family or take your kids to volunteer during the holidays. The memories you make will last longer than any hot new toy.

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