Family Financial Planning: The 5 W’s

Wednesday, May 26, 2021

1. Who Should Participate in Family Financial Planning?

All family members, if they can talk and count money, would benefit from discussing the family’s financial planning and should be involved in the process. The last few weeks I have discussed how books and games can help families begin the discussion around money. The younger family members may not fully understand financial planning, but if you make it a yearly family activity, they will eventually understand money and be able to better manage it when they are out on their own. Many families also include a financial advisor or family financial planner to assist them in making financial decisions. Below is a list of actions families can take to start their own family financial planning day.

2. Why Should the Family Plan Their Finances? 

(I’m going to list this out to make it easy for families to check off and follow)

Financial Goals

• Realistic
• Specific
• Set deadlines
• Short/mid term goals
  • 3 months wages saved for emergency fund
  • Vacation fund
  • Savings for other large purchases
• Long term goals
  • Paying off mortgage
  • Setting aside for college
  • Life insurance

Budget – there are lots of free or paid phone apps and websites to help with this

• Income – find all the sources of money
  • Monthly wages/tips
  • Cash on hand
  • Money apps with balances
  • Savings
  • Investments
  • Real estate 
  • Gift cards
  • Piggy bank/loose change
• Bills 
  • Pay off as quickly as possible
  • Always pay on time
  • Make a spreadsheet of all outgoing money and when it is due 
  • List all the credit cards and loans, interest rates, how much is owed
• Needs – Keep a list of things the family needs to save up for
  • Fixing
  • Repairing
  • Replacing
• Wants – Keep a list (or Family Vision Board) of things the family really wants to save for
  • Activities
  • Dining out
  • Entertainment
  • Mini-vacations
• Track Spending
  • Avoid overspending
  • Get calendar or phone alerts
  • Have info for tax purposes
  • Annual review
  • Budget planning for next year

Debt Repayment 

• Timeline to pay off
  • Pay off the cards with the smallest balance or the highest interest rate with highest balance
  • Pay off one card at a time with large lump sums
  • Continue to pay other card minimum payments
• Refinance
  • Car
  • Home
• Consolidate
  • Credit cards
  • Bank Loans
  • Financial Aid Loans

3. What Should the Family Plan?

• Retirement planning
  • 401k
  • Roth IRA
  • IRA
• College planning
  • 529 college savings account
  • Scholarships
  • Grants
  • Financial aid
  • Loans
• Insurance planning
  • Vehicle
  • Home
  • Health
  • Life 
• Estate planning – last will and testament

4. When Should the Family Start Financial Planning?

Families first start their financial planning at home at least once a year, usually at the end of the year so that they can budget and plan for the upcoming year. However, if the family has never had a discussion about money, now is the perfect time to start. My recommendation is making financial planning a fun family holiday one time a year you all look forward to spending with one another.

5. Where Should the Family Go For Financial Planning?

Home is the best place to start financial planning, but including a financial advisor or family financial planner can help the family find the best resources that fit the family’s needs, guide them all year long, and offer advice on when to adjust the financial planning as times change. 

This is where I can help out as a member of the nonprofit team, Revolution Financial Management. I am a licensed agent for the state of California, however, we have licensed agents all across North America who can assist anyone located in the United States and Canada with FREE financial services. If you would like more information, please email me at: dr.brainnerd@gmail.com. 

Thank you for reading, best of luck on creating your family financial holiday,

Dr. Jaime Brainerd, Ed.D.