Article written by Sherin Dev; Follow me on Twitter or Subscribe to articles
This is an article set to understand the “role of family members to the financial planning” process. Through this article, I intend to reveals the core factors of financial planning success through the participation of each family member by giving right contributions. Various financial planning articles in this blog already informed the must requirements of participating family members to the financial planning process to get better and sharp ideas when work as a team for the success of it.
There are financial advisers who provide financial planning service for clients. I have no idea, how many of them aware and insist to their clients to the requirements of participating their family members to the financial planning process. A wise financial plan never fails to discuss and get possible ideas from all the members in a family, to achieve the task as a huge success. Without participating members in a family, I strongly feel the financial planning process would not be completed or produce required results. This short article reveals possible roles each member in a family can contribute to your family financial planning. Before reaching to the main point in this article, readers should know different areas of a good family financial plan. Here are those points to have a quick scan:
- 1. Status assessment and goal setting2. Family budgeting3. Debt Management4. Emergency Fund creation5. Protection of family members from various incidents6. Investment planning for various goals7. Possible money saving activities8. Additional Income generation
9. Teaching members to have financial freedom
It is up to you to decide how your family members participate and contribute to the success of above sections. It is not possible by anyone to completely do family financial planning alone by meet all the above criteria’s and without participation from family members. Areas like goal settings, budgeting, money saving, additional income generation and financial education requires active participation from all the members in a family or it would fail to meet required goals. How can you involve your family members to these areas? To get a right answer, you should understand how and where your members able to contribute and to what areas. Here is a short suggestion from my experience to understand this idea in a better state.
1. Role of Family Head (It is you or the bread winner of family)
- Remember your spouse would be your immediate contact point. As the head of a family, you would be the one should take initiatives to start the family financial planning. To execute and complete the financial planning, a working blueprint is the first thing one should have in hand. Creating such blueprint requires lots of efforts and time. To give you a better idea, above 9 areas should have presence in a financial planning blueprint.Family head have sole responsibility to assess present status, work with family members to get right ideas to create a good plan, decide when and where to start and complete each steps successfully, identify the obstacles associated in each step and tackle those obstacles with the help of members and finally bring a blueprint to great success. He should be the active participant and final word to each areas of financial planning and confirm any action that receives complete support from family members.
Family head requires deciding some of the financial planning factors like debt management, emergency fund creation, insurance protection to self and family members, decide financial planning goals and work for an investment strategy to achieve these goals. He is still required to get ideas from family members on each of these areas, but the final decision should come from him by combining all possible sharp ideas.
2. Spouse of the family head (Generally wife but some time husband too)
- Spouse of family head have a very important role to the family financial planning process. A spouse could actively participate to the areas of money saving plan inside and outside the home, creating additional possible income by work part time or through small businesses, to support the main income stream of the family. This would be highly helpful if a family have huge debt and active debt management plan in place. Spouse could take the best part in the budgeting side of family financial plan as a total regulator by ensure the budget plan is intact.
3. Senior citizens in the family
- I strongly feel the existence of senior citizen in our family would give us enormous security feel. They could probably the parents of family head or spouse. They generally have very good knowledge from long years of life experiences and have sharp ideas to support family financial plan. They can easily participate to the family financial planning by provide right direction and support to each of the process. As they have lots of time, they can also contribute to financial process steps through assess sharply. If educated, they would be the right personnel in your family to educate or mentor your kids to various subjects. Their experience can consider as a huge supportive factor to each and every step in a family financial plan.
4. Kids in a family
- Intelligent people never avoid kids at the time of family budgeting. Parents should understand and allocate sufficient amount in each month to meet children’s needs. Thus, they should be an active participant at the time of budgeting discussions. Another important factor is, kids should grow with sufficient financial literacy and saving habits. They should aware where and how to save money inside and outside the home. Elders should support them by providing necessary training to bring their kids with financial knowledge and understand them the difference of ‘want’ and ‘need’. Kids should be wise to spend money and save maximum to support their parents.
There are other roles available to members in a family at the time of financial planning, as I said earlier, parents should understand how and where their involvement really required and that shouldn’t be avoided.