8 ways to manage your family finances

Every period of life has its financial challenges, but it also has its opportunities. As we’re sure you already know, becoming a parent comes with a lot of responsibility. Whether you’re just starting your family, caring for children, or also caring for your parents, it’s important to take a holistic view of your finances to better understand your current spending habits, long-term goals, and how to seek financial advice when you need it.

This article’s goal is to help organize family finances so you can live with more security and confidence. Keep in mind that “family” is an inclusive term, meaning the people you love in your home, regardless of things like marriage status or children. Whatever stage you are at in your savings journey, there’s never a better time to start improving your money health than right now.

1. Track spending in your bank’s app

We get it — life is busy. There are your own interests, as well as family activities (when did travel sports become such a thing?) So, your bank account might be something that you don’t check very often. Today, it’s easier than ever to access your statement through online and mobile banking. You can get a look at spending habits as well as how much you’re saving. Getting into the habit of regularly checking your accounts would allow you to quickly see a suspicious withdrawal from your debit card from a store you’ve never visited or cancel that recurring fee for a streaming service you no longer use. On a more positive note, you might find a little extra leftover to put towards larger goals. While there are many great apps that can help with budgeting, don’t discount your own bank’s app, which might offer unique finance planning tools and personalized insights.

There are several ways to check in with your spending and savings. If it is time to check in on your monthly spending habits, check out these helpful tips on managing monthly expenses.

2. Pay off high-interest debt

One of the most important things you can do for your finances at any point in your life is to pay off high-interest debt. According to the Federal Reserve, Americans hold over $988 billion in credit card debt. Let’s not be a part of that statistic. Research current interest rates to find out if you may be ready to refinance or pay off more debt (with a bonus of improving your credit score!). Since you have already checked your spending and savings habits to look for any additional funds (tip #1 above), could you throw them at your high-interest debt and pay that down?

3. Work with a financial professional

Here’s a simple question: When was the last time you looked over your retirement contributions? It can be beneficial to check in on your nest egg or to make adjustments. You may be making more money now than you were when you started contributing (go YOU!), and perhaps you want to boost that helpful 401(k) plan at your new job, open an IRA, or check on your investments. When you were younger you may have been living paycheck to paycheck. Now, you might have a little more to put away for your future. If you have adult children, it’s also worth having a conversation about how much you’re willing to contribute to their expenses, such as student loans, tuition, or even rent.

Also, consider working with a financial advisor who can help you figure out the best ways to protect your wealth and plan for the future. Be sure they are registered with the state you live in and ask for a list of fees ahead of time. Some topics you may cover include different insurances, investment options, retirement, and tax planning. The goal is to get a complete picture of all your liabilities, assets, income, and expenses. You’ll probably set up a regular occurrence of meetings, generally once or twice a year, according to your needs and life goals.

4. Create an emergency savings fund

You’ve probably heard the phrase emergency savings fund before. You may have already started one, though that can sometimes be hard with all of life’s bills. If you haven’t begun one, there’s never a better time than right now. Now that you have a few more years of pay cycles, it could be time to revisit the fund you started and add a little more cash per paycheck. The general rule? About six months’ salary, depending on your financial stability. Staying on top of your finances will feel easier when you know you have a backup plan should the stove break, the car battery die, or should any other unexpected costs occur. If you need to dip into it, just be sure you get back on track and replenish the funds.

5. Check on your college savings accounts

Chances are, if you have children, you’ve already started saving for college. Those birthday cards with money inside add up but with college costs rising, it could be time to check in on your savings, including any 529s. College Board reported pricing for public college tuition last year hovered around $11,000 for in-state and a public four-year out-of-state school cost around $28,000. If you’re considering using some of your retirement money to pay for college, you may want to pause and weigh out whether that’s the right move. Ensuring you’ve invested in the right college savings accounts is another aspect a financial advisor could help with.

6. How to save while part of the “sandwich generation”

Caring for aging parents while still caring for your own children? You’re not alone. Even if your children are adults, with high rent prices and a tough job market, many “kids” are returning to the nest. In fact, in 2022, half of adults ages 18-29 were living with their parents, according to the Pew Research Center. While that could shift at any time, another study from Pew showed “Nearly half (47%) of adults in their 40s and 50s have a parent aged 65 or older and are either raising a young child or financially supporting a grown child (age 18 or older).” Given these statistics, it could be time to sit with your parents (or a financial advisor) and go through their assets, should they someday need long-term care.

Also, check in with your employer. Some companies offer a Dependent Care Spending Account (DCSA), which allows you to set aside pretax money from your paycheck to be used toward daycare or child-care expenses. In a DCSA, your contribution limit is determined by your tax filing status. For more information, visit the IRS. You can also check with the HR department at your company for more information.

7. Evaluate your insurance needs

While taking a look at your finances, now could be a good time to also consider your insurance coverage. Is your health coverage what you need for the size of your family? If you’re two working adults, is one plan more beneficial than the other? Does your car insurance offer the best bang for your buck? Take stock of all the policies you’ve had in place since you started adulting, and make sure the coverage is still appropriate. Some families might need disability insurance for a loved one, or life insurance should the unexpected happen. And when purchasing life insurance, keep in mind there are two types of policies: whole life and term. Whole life is just as it sounds, whereas term means a five- or ten-year period. Having a plan in place could bring peace of mind if you don’t already have one.

8. Leverage home equity as another way to reach your goals

Do you own your home? Depending on mortgage rates and built-up equity, you might want to consider refinancing or getting a home equity line of credit (HELOC). Essentially, a mortgage refinance replaces your current home loan with a new one. Refinancing is a great option when people want to reduce their interest rate, or switch from an adjustable to a fixed-rate mortgage. You’ll need to go through the application process again, including underwriting and closing. To prepare, you’ll have to gather up some materials, including:

• Pay stubs and W2s
• Tax returns (if applicable)
• Investment and retirement income documentation
• Bank statements

After you sign the paperwork and pay your closing costs (you might need a bank-issued check), it will take about four business days for your refinanced mortgage to take effect. That's because by law you have three business days to change your mind and rescind the new loan.

With a HELOC, you’re taking out a line of credit that uses your home as collateral. The amount you can borrow is based on the value of your home minus any mortgage(s) you may have. A HELOC can be used to fund a variety of goals, such as home improvement projects, debt consolidation, emergency funds, education, or as an alternative to a personal loan.

Ready to come together with your family and meet your goals?

Now that you’ve had some time to read through eight options to save as a family, keep this in mind — it’s not so much about taking things away, but putting money toward what really matters. Saving for the future is a lifelong journey. Seek out books, podcasts, and online resources from trusted sources to learn more on the topics of budgeting, saving money and investing. The more you know, the more confident you’ll be making financial decisions. Learn about all our account options and how we’re ready to help you reach your money goals.