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The Importance of Family Financial Planning

Did you know that an estimated 72 percent of American households do not have a proper financial plan? However, effective financial planning is a crucial process that can help you map out your future. Whether you are just starting a family or already have one, consider having a financial plan. Staying on top of your finances will enable you to avoid financial pitfalls both now and in the future, effectively helping you achieve financial independence.

What is Family Financial Planning?

Family financial planning includes optimizing your family’s financial resources to achieve your goals in the short-term and long-term. A family financial plan includes savings for milestones, unexpected expenses, and more.

Why is Family Financial Planning Important?

Helps You Define Your Priorities

One of the most important aspects of family wealth planning is setting goals and creating strategies to achieve them. Part of this will involve deciding what is most important to you. Financial planning helps you prioritize your financial goals. That way, you can better allocate and properly utilize the available resources. This will put you in a better position to realize your objectives.

Monitoring and Tracking Finances

A financial plan is not complete without a budget. A good and realistic budget gives you a clear understanding of your sources of income and expenses. You will also be able to monitor and track your finances, giving you the accountability you need to stay within your budget. In addition, reviewing your plan regularly will allow you to take proactive and actionable steps to achieve or realign your goals. This will ultimately help you create financial stability.

Debt Management and Reduction

If not managed properly, high debt levels can lead to financial distress. As such, you should identify all your debts and list them in order of importance. Good family financial management will typically include strategies for managing and reducing debt. These strategies can help you improve your cash flow so you can build on your current and future financial goals.

Better Tax Planning

With proper financial planning, you can save a significant amount of money on taxes. Making tax planning part of your financial plan allows you to evaluate your investment choices, income sources, and retirement accounts. You can also identify potential tax-saving strategies depending on your unique circumstances. For a smooth process and better results, consider working with a family financial planner along with your CPA to minimize your taxes and maximize investment growth potential.

Preparation for Emergencies

Every family financial planning guide will emphasize the importance of having an emergency fund. Indeed, an emergency fund helps your family to pay for unexpected expenses that could otherwise hurt you financially. No one expects to be part of a workforce reduction or to become unable to work or earn the same amount as before. However, not having an adequate amount of cash reserves for these events can make an unexpected and unfortunate event even worse. By covering life’s unexpected events as part of your family wealth planning, the fund not only ensures you are prepared for emergencies but also such events do not derail your long-term plans.

Increase Investments

Making smart investments is a critical step to achieving financial freedom. Financial planning can help you create a diversified investment portfolio. When you have a solid family financial plan, you will be better able to examine your financial goals, adopt an investment mindset, develop effective strategies, choose the right investments, and stay focused as you work towards growing your income. Reviewing your financial plan regularly with your financial advisor allows you to monitor and adjust your investment portfolio as needed.

Family Security

There are several ways financial planning for families can help to achieve financial security. In addition to investing, you can develop sound money habits, protect yourself with life insurance, and enjoy the peace of mind that comes with having an emergency fund. That way, your family will have greater financial security and freedom.

Enhanced Financial Awareness

Designing and implementing a financial plan will help you better understand concepts such as budgeting, managing, saving, and investing money. You will also have the ability to know your financial health, make informed decisions, and navigate uncertain economic times. Lastly, achieving financial literacy puts you in a great position to teach your kids financial responsibility, further enhancing family financial management for the future.

Retirement and Estate Planning

Oftentimes, financial planning for a family will include retirement and estate planning. Creating and sticking to a plan can make it possible for you to retire early. Also, successful estate planning will allow you to protect your family and manage your assets after you pass away.

Start your Family Financial Plan with Cary Street Partners

Do you need financial planning help? Look no further than Cary Street Partners. Our family financial planning services are designed to help you organize your financial life. We will work with you to develop and implement a personalized financial plan that will meet your needs and enable you to achieve your goals. For more information, contact us to speak to one of our financial advisors.


Paige W. Garrigan
Chief Marketing & Transitions Officer, Managing Director

The Wealth Wisdom Series is curated by Paige W. Garrigan, drawing from the experience and input from Cary Street Partners’ Financial Advisors. Collaborating internally with the team she gathers pertinent and timely topics for readers. With nearly 30 years of experience in the financial services industry, she has acquired a wealth of knowledge across various facets of the industry ensuring comprehensive insights for readers.

Cary Street Partners is the trade name used by Cary Street Partners LLC, Member FINRA/SIPC; Cary Street Partners Investment Advisory LLC and Cary Street Partners Asset Management LLC, registered investment advisers. Registration does not imply a certain level of skill or training.

Any opinions expressed here are those of the authors, and such statements or opinions do not necessarily represent the opinions of Cary Street Partners. These are statements of judgment as of a certain date and are subject to future change without notice. Future predictions are subject to certain risks and uncertainties, which could cause actual results to differ from those currently anticipated or projected.

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