Before you started your family, your finances may have been simple. You had to cover your bills and maybe save a little. You didn't have other people depending on you. As your family starts to grow, you and your partner will need a solid financial plan.
Three big money questions for growing families:
1. Will we buy a home some day?
If yes, you'll need some savings to get started on the down payment. For many couples, saving enough is the hardest part of the process. To get the best mortgage deal, you have to put down at least 25% of the price of your home. Of course, you don't have to follow that guideline. These days, you can sometimes buy a home without putting any money down.
2. How will we take care of our children if something happens to us?
If you died tomorrow, what impact would it have on your family's future? How would they pay the monthly bills? Would your partner be able to pay the rent or mortgage without your salary? Would your family be able to enjoy the same lifestyle?
If you have children from an earlier marriage, it becomes more complex. Who would take care of them if you were gone? How would their education and other costs be paid for?
To address these issues, you'll need to update your life insurance and other insurance policies. You may have some insurance from work, but you may need a different kind now. You might even need to get more insurance.
Also, an up-to-date will becomes more important than ever. You can use it to state your wishes for their future if something happens to you. You can name whom you would like to be a guardian. Some people provide money for their children's future through an informal in-trust account.
3. Can we save some money for our children's education?
With the cost of education after high school rising, many parents try to start saving for their children's education as early as possible. With some savings plans, the government will add some savings to yours. You may also get a tax break.
Remember: Raising a family can really change your financial situation
Make sure you keep your financial plans up to date. You may want to visit a financial adviser or a financial planner to help you with your planning. They can help you through the steps you need to take to create a formal long-term plan.
Content in this section is provided in partnership with the Investor Education Fund, a non-profit organization promoting financial literacy to Canadians. To find out more go to GetSmarterAboutMoney.ca.