The Family Financial Checklist: 10 Things Every Parent Should Have in Place

Having kids seems to come with an endless list of things we’re supposed to have sorted. There are the everyday things like making sure everyone has clean clothes, there’s food in the house and nobody has suddenly remembered at 9pm that they need something for school tomorrow. Then there are the bigger things that are really important, but somehow never feel quite as urgent.

Money stuff definitely falls into that second category for me. It’s very easy to concentrate on this month’s bills and everything that’s happening right now, while things like building savings, making a will or looking into term life insurance keep getting pushed further down the list.

The problem is that these are often the things we really need to have in place before we need them.

You absolutely don’t need to have every area of your finances perfectly organized. I don’t think many families do. But if you’ve been meaning to get your family finances a little more organized, this checklist is a good place to start.

1. A Realistic Family Budget

I know, budgeting isn’t exactly exciting, but having some idea of what’s coming in and going out every month makes pretty much everything else on this list easier.

And your budget doesn’t need to account for every last cent. Personally, I think a budget that you can actually stick to is much more useful than one that looks perfect on a spreadsheet but falls apart within a week.

Start with your household income and your essential expenses, including your mortgage or rent, utilities, groceries, insurance, transport and minimum debt payments. Then look at everything else you’re spending.

If you’ve never done this before, going through the last couple of months of bank and credit card statements can be really eye-opening. There are nearly always a few things you’ve forgotten about or expenses that have crept up without you really noticing.

Once you know where your money is going, you can start deciding where you actually want it to go.

2. Life Insurance

This is probably one of the easiest financial jobs to put off because none of us particularly wants to think about why we might need it.

But if someone else relies on your income or the work you do within your family, it’s worth thinking about how they’d manage financially if you weren’t there.

Term life insurance provides coverage for a set amount of time. If you die while the policy is active, the death benefit can help the people you’ve left behind with things like everyday living costs, mortgage payments, other bills and the costs of raising children.

When you’re thinking about how much coverage you’d need, there’s more to consider than your salary. There’s the mortgage, debts, childcare, education and all of those normal everyday expenses that aren’t going to disappear.

It’s also worth remembering the financial value of a stay-at-home parent. Even without a salary to replace, paying somebody else for childcare and all of the other things they currently do could have a significant impact on the family budget.

It’s not necessarily something you look at once and never think about again either. A new baby, a bigger mortgage or a change in income are all good reasons to check whether the protection you have still makes sense for your family.

3. An Emergency Fund

An emergency fund is basically money you’ve deliberately put aside for the things you weren’t expecting.

I’ve talked before about why having an emergency fund is so important, particularly when it comes to avoiding having to rely on credit every time something unexpected happens.

The car breaks down. The refrigerator stops working. There’s a medical bill you weren’t expecting. Your income suddenly drops.

Without any emergency savings, these expenses can end up going straight onto a credit card and turning one expensive month into a debt you’re still paying off months later.

Don’t be put off if you can’t suddenly save thousands of dollars. You can start with a much smaller target and build from there. Even having $500 or $1,000 sitting in a separate savings account can make a huge difference when something goes wrong.

The Consumer Financial Protection Bureau has some useful information on building an emergency fund if you’re starting from scratch.

The important thing is that this money is accessible when you need it, but ideally not sitting somewhere you’re tempted to dip into every time you overspend.

4. A Plan for Your Debt

Mortgages, car loans, student loans and credit card balances are a reality for millions of families.

What matters is knowing what you owe and having some sort of plan for dealing with it.

Make a list of your debts, including the balance, minimum payment and interest rate on each one. If you’ve got high-interest debt, particularly credit cards, you might decide that tackling that needs to take priority over some of your other financial goals.

There are different ways you can approach paying off debt too. The Consumer Financial Protection Bureau has a useful guide to reducing debt, including the highest-interest-rate method and the debt snowball method. There’s no point choosing a method that looks great on paper if you know you’re not going to keep it up.

You don’t necessarily need to throw every spare dollar at debt either. Depending on your situation, it can make sense to build a small emergency fund at the same time so that the next unexpected bill doesn’t simply go straight back onto the card you’ve been trying to pay off.

The main thing is knowing exactly where you stand rather than avoiding looking at the numbers because they’re uncomfortable.

5. A Will

Making a will is another one of those jobs that’s very easy to leave for another day.

When you have children though, a will isn’t only about deciding who gets your money or possessions. It’s also an opportunity to set out your wishes about who you would want to care for your children if both parents died.

Exactly how wills and guardianship work varies by state, so this is one area where it’s worth getting proper advice rather than downloading something random from the internet and assuming you’re covered.

Once you’ve made a will, remember to review it after major life changes too. Having another child, getting married or divorced, moving to another state or a significant change in your finances can all be reasons to take another look at it.

6. Up-to-Date Beneficiaries

When was the last time you checked the beneficiaries on your life insurance, retirement accounts and other financial products?

If the answer is “I have absolutely no idea,” you’re probably not alone.

This can be a really quick financial admin job, but it’s an important one, particularly if you’ve married, divorced, had children or experienced another big change since you originally opened the account or policy.

Make a list of any accounts where you’ve named a beneficiary and check that the information still reflects what you want.

It’s also worth making this part of your regular financial check-in so it doesn’t get forgotten for another ten years.

7. Retirement Savings

When you’re raising a family, there is always something that needs money.

It’s really easy to put all your attention into what your kids need now, or what you want to give them in the future, and forget that you need to prepare for your own future as well.

If your employer offers a retirement plan, make sure you understand how it works and whether your employer offers matching contributions. If you don’t have a workplace plan, look at the other retirement saving options available to you.

You don’t have to suddenly start putting huge amounts away. Even if you can’t put much away at the moment, you can always start small and increase it later if you’ve got more money available.

Investor.gov has a useful collection of retirement planning resources if this is something you’ve been meaning to look into.

8. Savings for Future Family Expenses

Once the essentials are covered, it’s worth thinking about some of the bigger expenses you know are likely to come along later.

College might be one of them, but it doesn’t have to be the only goal.

Maybe you know you’ll need to replace a car in the next few years. Perhaps you’re hoping to move to a bigger house. You might want to help your children with their first cars or other expenses when they’re older.

Having separate savings pots for specific goals can make these big expenses feel much more manageable.

Again, don’t worry if you can’t save hundreds of dollars toward every goal each month. I’d rather start putting $20 a month toward something than keep waiting for the magical point where there’s suddenly loads of spare money left at the end of every month.

9. A Folder of Important Financial Information

This one is less about how much money you have and more about making sure somebody else could actually make sense of your finances if they needed to.

Think about all the financial information you deal with.

Bank accounts. Mortgage details. Insurance policies. Retirement accounts. Loans. Credit cards. Utility providers. Important contact details.

Would your spouse or another trusted person know what exists and where to find everything?

Create a secure record of your important financial accounts and documents and make sure the appropriate person knows how to access the information if something happens to you.

That doesn’t mean keeping a sheet of passwords stuck to the refrigerator! Passwords and other sensitive information should be stored securely. The aim is simply to make sure your finances aren’t a complete mystery to everybody else in the family.

10. A Regular Family Finance Check-In

Finally, make a date with yourself to go through all of this again.

It doesn’t need to be every week or even every month. Once or twice a year can be enough for some of the bigger financial jobs.

Look at your budget. Check your savings. See how your debt balances have changed. Review your insurance coverage and beneficiaries. Check your retirement contributions. Think about whether your family’s priorities have changed.

You might find that everything is still fine and you don’t need to change anything.

Or you might realize that the budget you made three years ago bears absolutely no resemblance to what groceries, utilities and everything else cost now.

Either way, you’ll know where you stand.

You Don’t Have to Sort Everything at Once

If you’ve read through this checklist and realized you’ve got quite a few things to sort out, don’t panic and try to do all ten this weekend.

Pick one.

Maybe this month you finally look at life insurance. Next month you start building your emergency fund. After that, you make an appointment to sort out your will.

Getting your family finances in order isn’t really something you ever completely finish anyway. Kids grow up, incomes change, expenses change and your priorities change with them.

The important thing is knowing that you’ve put some protection in place for the family you’re working so hard to provide for now.