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What are two or three potential life events which affect a personal budget?

Getting married, having a baby and sending a child off to college are three of these major life events that often require you to review, revise or revamp your finances.

discover.com - What a ring, pacifier and diploma mean for family financial planning

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When you finally get to put your feet up and close your eyes after a whirlwind wedding weekend, or during the exhausted, exuberant days after a baby is born, you (understandably) probably aren’t thinking about family financial planning. But you probably should be. While there are many changes that could impact your finances at any time, such as a raise at work, moving or unexpected vet bills, there are some that can require a significant shift in your family financial planning. Getting married, having a baby and sending a child off to college are three of these major life events that often require you to review, revise or revamp your finances. It may seem like an overwhelming task. But financial planning for the family can ease your money worries, help you leverage tax strategies to your advantage and better plan for your future. Whether you’re tying the knot, welcoming home a new baby or sending one of your own off to college, here are a few tips to help you complete financial planning for the family:

Getting married

When you’re single, your focus is on your own expenses, debts and priorities. As you enter a serious relationship and begin to combine your life with another person (who has his or her own expenses, debts and priorities), it can get a bit complicated. “The biggest challenge by far is figuring out how to manage money together. Who is paying the bills? What are you saving for? What is a reasonable amount of discretionary spending? Where is your money held?” say Matt Becker, CFP®, founder of a financial planning practice focused on working with new parents. “No matter how close you are, you will absolutely have different opinions about these things and you’ll have to work hard to listen to each other and create a system that works for both of you.” Reconciling different value systems around money can be challenging for many couples. This is often when couples call in a professional with expertise in financial planning for young families as a resource. Figuring out how much money you’ll need to fund your financial goals (and deciding what those are specifically—buying a house? International travel? Early retirement?), reviewing retirement accounts and maximizing your company benefits as a couple are all ways to merge your finances and plan for your future. These are some of the key elements to include when doing family financial planning.

But to meet your goals and realize savings, talking is key.

“Lack of communication is the biggest obstacle I see to financial success,” Becker says. “You really need to be talking regularly to each other about both your short- and long-term goals to make sure that you’re on the same page and that everyone’s needs are being met.”

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Having a baby

According to Costhelper.com, the cost for full-time childcare for a two-year-old is an average of $611 a month in the U.S. That’s why having a baby can dramatically change financial planning for young families. “Everyone knows that childcare is expensive, but it’s hard to understand just how big the cost is until you’re faced with paying the bill every single month,” Becker says. “It’s a real struggle for a lot of parents.” If you plan to have children one day, setting aside savings as early as possible for some of the bigger expenses, like transportation and housing, can help. Healthcare, for both mother and child, and baby gear can also eat into your household budget and should be factors when financial planning for young families. And there are essential recurring expenses that parents need to prepare for as well, such as larger grocery bills, diapers, clothing, toys and, eventually, education. When financial planning for young families, it’s more important than ever to prepare for difficult times, too. Insurance can protect your family if you or your spouse are injured and can’t work, for example. Have a plan in place in case a spouse dies unexpectedly. It’s not easy to talk about, but it will bring your family peace of mind. “Life insurance, disability insurance and basic estate planning are all crucial for young families, and they’re not always cheap,” Becker says.

Sending a child to college

College costs have skyrocketed over the last few decades and while you might be looking forward to your years as an empty nester, college expenses can lead to some considerable changes in your family financial planning. Consider the following:

1. Your budget

More of your disposable income might go toward tuition—the major college expense—but there are other college-related costs to consider when financial planning for the family, says Laura A. Seymour, CFP®, investment advisor in Edina, Minnesota. Those additional costs could include college visits, fees for standardized tests and applications, dorm room decorations, study abroad and holiday travel home. Making sure your budget accounts for these new costs is essential.

discover.com - What a ring, pacifier and diploma mean for family financial planning

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