Financial planning for the modern family

Life today is complex. When you have a family there are even more considerations.

Today, family can mean many different things. The term “nuclear family” which was first coined in 1947 is far outdated with four out of five households no longer fitting the mold of: mom, dad, two and a half kids and a dog.

The modern family includes multiple generations living in one house, single-parent families, same-sex couples, common-law, blended, boomerang and many other combinations of people living together.

Families are changing and the way we are living is also shifting. Salaries seem to stay stagnant while the price for everything else continues to rise.

There are more pressures for parents today, whether you are just starting to grow your family or have adult children living back at home. Financial timelines are shifting, and financial planning needs to keep pace.

• One in five millennials are delaying having children.
• One in four baby boomers still had adult children living at home in 2018.
• More than one in four Canadians between 35 and 64 were in their second marriage or common-law relationship in 2017.

From baby boomers feeling like their retirement is delayed due to extended years of supporting their children to millennials struggling to save for their first house, the need for tailored financial plans is stronger than ever.

Your family is unique, and your financial plan should be as well. Goals need to be personalized and not constrained to a one-size-fits-all approach to finances. The shape of families, values and goals have shifted and financial planning needs to as well.

Some questions the modern family might run into include:

• Who is responsible for paying for certain things, especially in blended families with children who have different parents?
• How do you handle owned property if you are living common-law?
• Is your partner financially responsible to help you care for your aging parents?
• If you don’t have a partner, what happens to your children if something happens to you?
• Can parents afford to help kids with a down payment on a house?

No matter the makeup of your household, you need a solid financial plan that accounts for your unique situation, life milestones and possible changes.

With competing priorities, saving for the future might feel overwhelming. Whether it is preparing for a new baby, sending kids to summer camp, saving for post-secondary education, a home renovation or for your own retirement – chances are, there is more than one financial consideration on your mind. There are five easy steps you can take towards feeling more secure financially:

1. Take a step back and set your short/long term goals. Look at the big picture of your family’s finances. What do you want to do in the next 3 years? 5+ years?
2. Determine top priorities. Do the largest budget items reflect what is most important in your life? Do the dollars you are putting away each month reflect your values and future goals?
3. Assess what matters. Prepare a detailed monthly budget that includes steps to get your savings in check.
4. Be prepared. Build an emergency fund. Life happens, we don’t know what is coming, but we can prepare for the unknown. Decide if your funds will be joint or separate from your partner and be sure to make the decision together.
5. Talk to a professional. Take your family conversations into a professional environment. This will help set your future up for success, not only just for you, but for your whole family – whatever that looks like.
   
   

It takes work to get to a place of financial balance and happiness in any family. With modern families there could be some financial baggage. For example, a remarried spouse might have tensions for providing for both biological and stepchildren. Whatever is weighing down your financial happiness, talk about it openly in the family and with a financial professional. Clearly outlining financial priorities and goals is essential.

Sources: Global News, CBC, StatsCanada