Managing Your Family Finances
Modern day family finances can get complicated. As we live longer and inevitably end up looking after our parents, meanwhile trying to put kids through college, figuring out how best to spend and where money should be allocated is more difficult.
With 3 generations to look after (or even 4 in some cases!), figuring out your priorities and making the most of what you all have is key to a happy life. Here are a few tips to help you out.
Ask For Help
Firstly, you should consider asking for help. Some companies offer Family Office Accounting Services which can help manage your finances as though you are a business. They can help you with estate planning, budgeting and investment services as well as planning for asset protection.
Having an impartial accountant to talk things through with will help your whole family to figure out how best to use your assets and money. They will be happy to talk with you all to find out what your separate priorities are as well as the overall goals of the whole family.
Power of Attorney
When you have elderly relatives who are not able to sort out their own finances anymore, you can apply for a Power of Attorney. This is a document that gives one person the ability to act on the behalf of another. In other words, should your parent(s) become incapacitated by a disease like Alzheimer’s, you will be able to manage their affairs for them including making financial decisions, medical decisions and legal decisions.
Giving someone your Power of Attorney is a very trusting move so if you are thinking about it in preparation for your own old age, do think carefully about who has your best interests at heart. You should also have a conversation about the most important decisions that may arise. These might include your preferences for end of life care to arranging your will. Having these conversations now will help in the long term, when you are less able to make a rational decision.
Saving and Prioritizing
Saving money should always be a part of your financial planning. Putting money aside for a rainy day as well as for retirement and college funds is the best way to plan for the future. You don’t have to save aggressively to make a big difference to your future. Just making a few changes to be a little more frugal can do the trick.
As a family, you should make your priorities clear in order to set out your financial goals. For example, if you would like your child to be able to go to college, it is best to start putting money away now so that you aren’t panicking about it later on. Taking time over saving is the best way to do it as you can save less per month over a longer period. You still end up with the same amount of cash at the end, but it won’t be so painful at the time!