How to Best Approach Family Financial Planning

Financial Planning | Family Planning

 Plancorp Team By: Plancorp Team
Family Financial Planning - A Comprehensive Guide

They say, "It takes a village to raise a child." Likewise, it takes a team to direct your family's financial future. This no-nonsense guide to setting your family's financial plan will help you make better decisions no matter your family budget or current financial situation.

What Is Family Financial Planning?

Family financial planning (FFP) is a systematic approach to managing your resources. The process goes beyond monthly income and spending. It helps you to get strategic and take a long-term outlook by considering your retirement and real estate investments. This type of planning aims to create lasting financial security and stability now for you as a parent and later for your children. 

The Importance of Family Financial Planning

How to explain the value of financial planning for a family is a challenge because everyone's goals are different. You might think family financial planning is about protecting you and your dependents from financial hardship. While this is part of the process, the ultimate goal is to elevate your lifestyle and achieve generational wealth.

FFP might mean starting a college savings plan early, so your kids have options when they graduate high school. Alternatively, it could mean setting up long-term care plans for you and dependents (e.g., a disabled child or aging parent) to avoid compromising care standards or draining savings accounts. 

In short, family financial planning:

  • Supports your family’s financial security now and in the future.
  • Helps you lay out a roadmap to reach your long-term goals.
  • Offers flexibility to make decisions for your family without money being the primary consideration.

Family financial planning often includes tax-advantaged investing, life insurance, retirement planning, and so on, but there’s no one-size-fits-all. Your certified financial planner (CFP) will help you decide the proper steps based on where you are now and where you want to be. 

How To Make a Financial Plan for Your Family

Learning how to do family financial planning takes long-term thinking, subjective reasoning, and professional input. The exact steps to lay out a family's financial plan vary depending on your unique needs, but we've laid out options generally in order below.

Budgeting and Spending

Personal finance is a major component in family financial planning. How you use your money now impacts savings, investments, and financial security. Budgeting helps ensure you can save money after covering income tax, health insurance, and essential needs each month. It also helps maximize your reserve to put toward retirement savings, college savings, and so on. Every plan starts with evaluating cash flow and spending accordingly while establishing an emergency fund for unexpected expenses.

Insurance Planning

Insurance is a necessary expense and can be a valuable part of a family’s financial plan if products and policies are chosen carefully. Insurance planning entails assessing your family’s needs and risks and comparing insurance products to mitigate them. The right insurance policies can safeguard your family’s finances, home, and other assets when emergencies (e.g., a natural disaster or medical bills) or anticipated events (e.g., aging) occur for a reasonable cost. Unexpected situations like a medical emergency or damage to your home can significantly set back your financial plans, but don't fall into the trap of blindly over-insuring. Meeting with a professional like a wealth manager can help you independently validate your level of insurance and compare plans.

Good and Bad Debts

If you owe a debt such as a car loan or mortgage, it must be paid off as part of your family financial plan. Depending on the nature of the debt and the interest rate, you may decide to pause or reduce savings goals to pay the debt sooner. However, certain debts can play a critical role in your financial plan. For example, taking out a mortgage on a house because interest rates have been at an all-time low could be a wise move, leaving you with more money in your pocket that you can re-invest to earn a higher interest. FFP is all about evaluating and maximizing your use of debt.

Financial Goals

You must also ensure your family’s financial plan needs are centered on goals, possibly specific to each family member. Suppose your child decides not to attend college. In that case, you can redirect money to a more flexible investment vehicle. That way, they still have funds to attend a trade school, start a business, or buy a home. We emphasize goal-focused financial planning because it helps everyone stay objective when it comes to things like evaluating investment returns. 

Estate Planning

Estate planning allows your family to decide how each individual’s assets should be managed, preserved, and distributed after death. It also considers what happens to that person’s assets and obligations should they be rendered incapacitated by an injury, disability, or disease. Without sound and enforceable estate planning, your family could be put through a lengthy probate process, and the deceased's wishes may not be honored. Don't fall prey to skipping this important step because of the morbid topic. A great estate plan is often the cap of a lot of hard work lining up your family's financial life, and failure to do so can be costly to those left behind.

Tips for Every Stage of Life

Family financial planning looks different for every household. Your strategy will evolve as you move through various life stages. 


Married couples typically combine finances or take on shared financial obligations, such as filing taxes jointly, sharing expenses, and co-signing on loans. In any case, newlyweds can protect their finances and prepare themselves for a happy life ahead by taking the following steps:

  • Disclose financial details to one another, including income, assets, and debt.
  • Practice transparent and compassionate discussions around finances.
  • Begin working together toward mutual goals.
  • Look into disability insurance in case one spouse becomes unable to work.
  • Consider buying life insurance, which is cheaper for younger adults.


As your family grows, budgeting becomes more important as children are a major financial obligation. Each child born means you have at least an 18-year commitment to provide a safe, supportive home. Plan for parenthood early by saving and investing. From preschool to graduate school, the cost of raising a child has recently been updated to be well over $1 million.

  • Re-evaluate your budget through every life stage and plan for healthcare and education expenses early. 
  • Ensure a healthcare plan protects your entire family and get life insurance to support dependents in the event of your passing. 
  • Explore financial aid to help cover daycare costs and other expenses if you are a single parent or have other special considerations.
  • Involve your children in discussions around savings, education, and wealth management as they grow older. 


Putting your kids through college is a noble goal, but it may not be your highest priority. Make sure you have a plan for creating a cushion for your future self before investing in your child's future. Putting your children through college won't help them very much if they end up having to financially help you as you age. 

When you decide to put away money for your children's college, consider the following: 

  • Talk to an investment advisor to see if you are prepared to save for your children’s college funds.
  • Consider tax-advantaged ways to use that money even if your children do not attend college.
  • Educate your children about scholarships and financial aid to supplement college savings or reduce tuition costs. 

Retirement and Post-Retirement 

Saving for retirement is a lifelong endeavor that can feel like a moving goalpost as inflation rises. Working with multiple investment accounts helps maximize tax savings and build nest eggs faster. 

  • Set aside as much as possible as you near retirement age, tightening your budget if needed.
  • Consider long-term or whole-life insurance with a long-term care rider before you turn 60.
  • Talk to an advisor before taking benefits early, as there might be better ways to pay for retirement.

Get Help Planning for Your Family’s Future

Family financial planning can be intimidating. Once you sit down and develop a strategy, you will feel more confident in your family’s future. Here are some quick benefits of tapping a professional:

  • Replace your gut feelings or lack of awareness with data and models 
  • Feel more certain your plan isn't missing something
  • Take advantage of complex investment allocation models or tools like tax-loss harvesting without needing to be a pro yourself
  • Have someone on your side to be an accountability coach or simply an ear to talk about finances without fear of judgment

You can take our free assessment to see what your plan might be missing and get connected with curated resources specific to your needs.


New call-to-action

Related Posts

Plancorp started with a unique philosophy: Always put your clients’ interests ahead of your own, and you’ll build a successful business. That was in 1983, but the sentiment still drives every decision we make. After 40 years of helping individuals, families and business owners plan for financial independence, our commitment to serving as financial life advocates is stronger than ever. More »