Protect your family tree

The desire to have children and nuture a family is strong among many of us, and with planning it's possible to achieve this important goal with your finances still intact.

In today’s day and age, it is not uncommon for people to put off starting a family because of the costs involved. In fact, research from Mortgage Choice shows these days one in three Australians delay plans to have children because of the expense associated with raising a family. 

This is unsurprising, given a typical middle-income family could expect to spend up to $812,000* raising two children from birth to their early 20s.

While 57% of families with children said they weren’t financially prepared for family life**, there is one sure way to combat this - good planning. By planning even just a little in advance, many Australians could more comfortably embrace family life, without compromising on financial wellbeing.

So let’s see what you can do to give your family a strong financial future.

1

Make financial plans

If you’re thinking of starting a family, start by setting some long and short term goals around what you’d like to achieve – annual holidays, a private school education, maybe a bigger home for your family.
Draft a manageable budget that allows room for regular saving. This should provide additional funds to live on during parental leave and savings that can help you purchase baby needs debt-free.

2

Build a diverse portfolio of investments

Put your savings to work by investing them into a diverse portfolio. The ongoing returns should provide extra household income, and the potential capital growth can be used to fund longer term goals like a quality education for your children.

3

Protect what matters

Your regular wage or salary is probably the lynchpin that keeps household finances ticking over. So it makes sense to have income protection insurance in place. This provides a regular income stream if you can’t work due to illness or injury.
With two parents often in the workforce, it’s also wise for everyone earning a wage, not just the main breadwinner, to have adequate life cover.

*NATSEM: The cost of rasing children in Australia, 2013

** Mortgage Choice 2015 Financial Confidence survey