Thinking about money as a family
We believe financial planning and advice is a family affair.
More and more of us want to use our money to create family wealth, not just personal wealth. According to recent SJP research, almost 70% of us expect to support our families financially, both before and after we die.
By having a clear idea of what’s right for your family, and for you, it’s possible to create a financial plan that works for everyone and lasts beyond your lifetime.
This financial to-do list covers the ten steps you can take right now to begin planning for and protecting your family and its assets.
Your financial to-do list
- Think about both your short and long-term future plans. Do you have some immediate goals that you want to save for, such as a family holiday, a wedding, or school fees? Or life events that may seem a long way off, such as reducing your work hours or helping pay for social care.
- Work out how much you’re worth. List how many pension pots you might have if you’ve changed jobs, find share certificates, check in on your ISAs or savings accounts.
- Earmark an emergency, easy-to-access cash fund just in case life throws you a curve ball. Ideally enough to keep you afloat for six months.
- Start protecting the people that you care about, your family home and your lifestyle. An insurance policy could literally be a lifesaver for your family.
- Encourage your children to get into good money habits from an early age by encouraging them to save and explaining what budgeting means.
- Start thinking about the legacy you want to leave, and to whom. Hopefully that time is a long way off, but small steps, taken early, can make a big difference to your family.
- Make a Will, especially if you have children, or your family situation changes. It’s probably the most important legal document you’ll ever make to secure your family’s future.
- Set up a Power of Attorney. A PoA means that someone you trust can make financial or welfare decisions on your behalf if you lose mental or physical capacity.
- Consider what means most to you and your family. Understanding your personal values will help you set clear goals.
- Talk to your family about your short-term and long-term plans and involve them in your decisions and plans.
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The value of financial advice
So many more people’s lives and futures could be improved simply by getting access to the support they need. It’s about helping people through life’s changes and navigating financial complexities with confidence and care.
92% of those taking ongoing financial advice said it had significantly improved their mental wellbeing.
47% say it has enabled them to reach a specific life goal or tackle one of life’s hurdles.
1 in 4 of those who had a financial adviser said they felt less stressed and worried less about money as a result.
Planning for many by thinking as one
Whatever we want for ourselves, we often want to support the people around us too.
If there’s more money in one part of the family than another, there are many ways you can divert it tax efficiently to help the financial security and wellbeing of the whole family – especially if you have more than one. You may want to share the costs of education or pay towards social care for your older relatives. Or help relatives upsize or downsize their family homes. Today’s financial advice can help move money so that it’s in the right place, in the right time, for the right people.
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Creating a financial plan for the family
If you find conversations about money difficult, you’re not alone.
When it comes to fights about finances, often people aren’t arguing because of a shortage of money – it’s that they’re unable to agree on important decisions they need to make as a family.
But if we don’t have those meaningful conversations, we can find ourselves rushed into decisions that could cost us both emotionally, and financially in a crisis.
Having a third party, such as your financial adviser, on board can be invaluable in bringing people together to talk openly about money.
Ben Stark is a chartered financial planner with over a decade of experience advising businesses and families. He is partnered with St. James’s Place Wealth Management.
